I started out sorting into large freezer bags. These are strong, flexible and store extremely well.
As my collection grew, I moved to shoeboxed sized Sterilite containers. These hold more parts but consume lots of space.
As my collection got even larger I moved to LEGO buckets stuffed with loose bricks and the old freezer bags stuffed in any empty space, plus the Sterilite boxes.

Now I have settled on large, rollaround Sterilite drawers and sets of Akro-Mills "nuts and bolts" drawers for everything else.

The large drawers are used to store basic bricks in each unique color at sizes of 1x2 and up. For example, I've got a big drawer with all white bricks, all green, all black etc.
For the smaller sized bricks, like 1x1, I mix the various colors together into one big drawer of 1x1s.

I also mix 2x2+ plates and 1x3+ plates of all colors together. This gives me basic bricks in about a dozen or so colors, uniquely available, but then plates are mixed together by color and type. In other words, I have 1x3,4,6,8 plates of all colors mixed together. For now, it's easy for me to look in and take what I need and to assess availability.

For 1x1 and 1x2 plates, they are sorted by color in their own seperate mini-drawers.

Special elements are sorted in unique drawers and the colors are mixed together UNTIL enough of the elements warrant separation by color. For instance, I might mix all the 2x2 radar dishes together in a drawer until I see a trend that I've got a majority of yellow dishes. When I hit the tipping point, I seperate the yellow dishes and put them in their own drawer right next to the mixed-color radar dishes. This results in all the various colors of radar dishes being in proximity. As my collection of same-color parts, grow, the nearby drawer space expands accordingly. For instance, one day I will have a row of 2x2 radar dishes in each color.

In summary, I sort by part-type first for just about everything, then by color as my collection expands.

I tend to build by theme. As a result, I can begin a project and go pull all the respective types of drawers I am going to need and have them nearby, or re-purpose an entire storage set just for the parts I will need for the respective project.

For space saving tips I find myself buying buckets and instantly consolidating multiple buckets together. If I get even more crunched for space, I open the polybags by bag type and mix them with others of their same type. For instance, the bags with small parts all get dumped into a bucket together. To expedite sorting I can then just reach for a bucket full of parts, but know that there are likely only 25 or so unique parts in the entire bucket (even though the bucket could have thousands of parts in it). This allows me to set up a sorting assembly line of sorts. This process works extremely well when I go buy 10 of a single bucket, set, etc. It does not work well when I get backlogged on misc. sets.

I am interested in hearing how the rest of you sort and store your parts.

Ashley