Blender 5 minute cloth tutorial. Sonix 2004.

In top view add a mesh>grid. Confirm x=32 and y=32. Exit edit mode, scale grid to 10x original size. Then scale in Y axis only so length is larger than width.
Add a new material to the grid. Add a new texture, make it Distorted noise, one Blender one Veroni. Increase the brightness and lower contrast for the texture. In material buttons, increase texture tiling to 10 for x,y,z.

Enter edit mode again and open the mesh edit buttons. Use the noise function to make the texture affect the position of the verts in the grid mesh.
To make deeper channels in the cloth use scale in Z axis. Use ALT+S to shrink/fatten the mesh, adjust to suit.
In front view, and still in edit mode, add a Plane. Scale this plane so the width matches the grid.

This method uses Blender's proportional editing system to mimic bunching up of the fabric.
With the plane still selected, press O to turn on proportional editing. Use the smooth fall off to start with. Now scale your plane, change the area affected by using + or - keys on the Num pad.

Repeat this procedure as required, turning off prop. edit tool to reposition the plane without moving the grid mesh, turn back on when ready to make more adjustments. Once happy delete the plane.

To fold or drape the mesh over an object as in the render at the top of the page, use the prop. edit tool again, in conjunction with rotate around cursor.

As the 3D cursor won't show in these viewport renders, I've represented it by the yellow cross. Place the 3D cursor where you want the fold to be, then select one vert a each corner of the grid and one in the middle, from the last edge of verts.
I used rotate and tweaked the area affected using + & - on Num pad as I rotated. Use the same method with grab to make the shape you want your cloth to be. Varying use of the prop. edit tool with smooth and sharp fall off, plus the area affected, will let you make more folds.

Finaly, apply set smooth to the mesh and one or two levels of subsurf. Add a new material to suit.

Not the best method, but a quick and simple means to get effective cloth. Experiments with this technique should prove rewarding.

Created for use with Blender 2.33a.

Blender link Download Blender