Mine is sorted by color, with a few extra "special" categories like batiks, repros, etc. The fabrics, regardless of size (unless very big) are folded to about 5x8" rectangles. I stand these rectangles, folded edge up, in plastic Rubbermaid-type storage boxes. The boxes are labeled and stored on bookshelves. I like this method because:
1. The fabrics stay clean and dust-free
2. I can pull out a box of a particular color without disarranging stacks of fabric
3. I can see at a glance what I have, and can riffle through the selections without removing them from the box.
Large pieces of fabric (multiple yards, backings, etc.) are folded, labeled with yardage, put into clear plastic bags, and stored flat on shelves. *REALLY* large pieces are folded lengthwise and wound around cardboard bolts from the fabric store. I try to label these with yardage also, and update the quantity when I cut a piece off.
Scraps (really small pieces) are, when I have time, pressed and cut into 2-1/2" squares, 1-1/2" strips (future log cabin quilt), and 3-1/2"-wide rectangles. I just finished a queen-size quilt top made only of 2-1/2" scrap squares...they do add up over time. If I can't cut one of these sizes, I pass the scrap along to a friend who uses even *smaller* sizes, or throw it away with a clear conscience. The cut pieces can be stored in shoeboxes or similar containers until you're ready to use them.
If you really get going on stash accumulation, I hope you have more wall space than I do!