Anyway, I figured I can't be the only person who struggled with this in the past.
This is what my sheets look like when I pull them off the shelves:
Step 1: Get your fitted sheet. Fold it in half, from top to bottom, with the wrong sides together. Tuck the elastic corners inside each other.
Step 2: Fold it in half, lengthwise this time. It's okay if it's wrinkled and lopsided, as you can see. The beauty of this is you can hide those imperfections. And heck, if you want to take the time to iron your sheets, be my guest! I'm not that far gone yet.
Step 3: Fold the fitted sheet into thirds lengthwise. This is one step you can get rid of some of those imperfections. Fold the lopsided side in first, for example. And even just smoothing it out at this point takes away the appearance of a lot of wrinkles.
Step 4: Fold in thirds from top to bottom. I folded the bottom up first because of it being a little lopsided. That way it gets hidden.
Step 5: Fold your flat sheet to be the same size as the fitted sheet and put them together.
Fold your pillowcase. We have minimum of two pillowcases that go with each set of sheets, so I fold the one (or three) extra and put them in between the fitted sheet and flat sheet. Then I take just one of the pillowcases and fold it into thirds lengthwise, and wrap it around the entire set before putting it on the shelf. I just like this but you can do your pillows any way you like.
I got the idea for the pillowcase from here (and there are easy folding instructions there too).
One of my favorite bloggers, Hallee, has a video blog about folding sheets.