Even though my youngest's room is fairly large, we keep all his clothes in his closet to maximize his room space. In the closet (which is not very deep, but fairly wide), we have nice, large, sturdy, stackable bins. His socks, undershirts, and underwear are in the top bin, foldable shirts in the first bin (we hang up a lot), sweaters and hoodies in the second bin, sweat pants and sport pants in the third bin, and pajamas and play clothes in the fourth/bottom bin. The rest is hung up.
My oldest's (16) dresser is also in his closet, though he has a traditional dresser. His room is designed/decorated in kind of a Zen theme, so he likes minimal furniture in there. He just has his bed, nightstand, wall shelves, and desk. I have no idea how he arranges his clothes (if he does!) in his dresser. Since he never wears sweats or sports pants, most of his clothes are hung up, but I do fold his undershirts, socks, underwear, tshirts, and sweaters/crewneck knits. He hangs his hoodies, jeans, and, of course, his khakis, polos, and button downs.