Awhile back we did a blog post showing how to fold fabric with comic book boards so they stand up neatly on a shelf. That is how I prefer to store my woven fabrics, such as cottons. For knits, however, that method doesn't work quite as well for me because they are so much more bulky and loose. Instead I like to fold-roll them a certain way so they can be stacked together on a shelf in such a way that they are all visible and accessible. They snuggle right in there with each other where I can see them, and when it's time to come out they're still neat and tidy. It's a win-win!
First I want to say that this method works best with knits that have not been significantly cut into yet. I fold them immediately when they get home (or that's the goal anyway) so most of the pieces I'm folding are still full rectangles. After they have been cut into and begin looking more like scraps, I put them in my knit drawer, which is handy when I just need small pieces.