I drew dark lines on my overlay layer where I thought creases or shadows might go and then light lines directly over these to suggest the bulge of the cloth over a fold. Conceptually I guess it is dark where I want to "push" back the cloth and light where I want to pull it forward. Also I tried to radiate these folds out from any corners like the crotch or anywhere the cloth would be pulled in such as near fasteners or detailing. I think the illusion really comes from having these lines of dark with lines of light hugging them above... not realistic but a pictoral convention or illusion... also works for aging faces with wrinkles. You can make a duplicate layer set to "luminosity" mode and use dogde and burn but I prefer working in black and white on the "overlay" layer since I feel I have more control... blending the dark and light lines with the smudge tool helps but the finaly effect really comes with the gausien blur I think.