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Great visual aid...I suck at this too. I always end up with a huge crumbled ball, and then I convince myself that that's the way folded fitted sheet are supposed to look, and the only reason that they look good when you buy them is because of that sheet of cardboard they always sneak in there.
This is basically the method I use, except that I don't have to lay it on the bed or nuthin'. I can just grab it, tuck all the corners into each other, and it ends up all nice and neat. I didn't understand why people have such a hard time with this until I remembered that I'm a three-dimensional designer, and some part of my brain just works this way. Give me a standardized test, though, and from my score you'd think I was too stupid to breathe...
I asked my Home-Economics-Challenged boyfriend to fold a fitted sheet for me once. 15 minutes later he handed it back to me, folded in half and then rolled up around his arm. I, too, never understood the problem some people have with it...