I like the cloth techique, I find placing solid lines, dark then a light colour based on your colour of cloth, the smudge took is great to get the folds, the best way to incorporate this would be to take a cloth drape it on a chair or another surface, place it loosely and then examine the cloth, where the light hits and the shadows are created, one of my ways of doing this is to figure where the light source is coming from, then i place a light lines along where i feel the cloth drapes on an object then depending on the light source lets say from the right, to the left of the light line, i will create a darker line half way then down, close enough to the lighter line then smudge it in strokes according to how the cloth will drape.

Once i am satisfied, I will then move to a next section, once my folds and light parts are done i take even a darker colour and using a smaller brush go and create the darker shadows where light is not present, then i take a lighter colour for the light parts and create where the light source is most bright, the best woudl be to use layers, based on that your base work you dont want to smudge anything that you have created thus far, as you see in the above pic, this is one of my earlier cloth details, it could have been sharper, but this one shows my techniwue for using the smudge tool.