I have mine on shelves, all folded the same way. Arranged by colors or theme, Blues, Greens, Seasonal, etc. I try to further subdivide by light/dark/medium if I have a lot of one color. Here is how to fold: It is really easy, and then everything is the same size:
http://www.youtube.com/watch?v=rkTlaMqRlwo
Kwhite and I laughed to find we both do this exactly the same way.