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This is what I learned from my mother in law, (years ago) who learned it from a lady she met at a laudromat when they were out on a camping trip. I hope I can explain it, it's easier than it sounds.
I do this standing and holding up the sheet.
Fold sheet in half crosswise (bring the short sides together, match up the fitted 'corners', as in put the corners inside the other sort of like 'spooning' if that makes sense. You now have two 'pairs' of fitted corners. Fold in half again so all four corners are layered together. Holding the corners together, shake out and straighten the rest of the sheet. It should look squarish and neatly folded except those fitted corners.
Fold in half again, then once more, short ends together, folding the 'corners' to the inside. It's not perfect, but those 'lumpy' corners are sort of hidden in the middle.
This is easier than it sounds. Let me know if it works for you. :o)
My sister just wads them up, tucks the whole sheet into one corner, they look like footballs!