I've heard it both ways. Some say that just craming it all int he sack is fine. Other say that it damages the fabric. I've heard that repeated folding in the same places will break down the fabric in those spots.

Personally, I fold over and then roll my tarp because I like to be able to unroll it quickly by standing at the head and flinging it towards the foot. I also like that this storage technique keeps all the guy lines in check.

I generally stuff rain flys and tents.