This is what I do:
Put it in the bag and stick it in your washer, lowest water setting, hot water, with a pair of jeans and a couple drops of dishwashing detergent. I actually keep a bottle of it near my washer these days.
NOTE: If you have a front loading washer, it's going to be very very hard to do this. Go to the laundromat.
Anywho, start the wash and, after about 5 minutes, stop and check your fabric. Different yarns felt differently. Case in point: I made this gorgeous crocheted beret the other day with SWS yarn, checked it after 5 mins, needed a bit longer, 5 minutes later, it was too small. grrrrrrrrr.........
When your fabric reaches the size you want, take it out of the bag, wring it out, run it under cold water and squeeze out all the soap. I then roll it in a towel to remove even more moisture. Pull it into shape if you need to and then let it air dry. I don't put it in the drayer because it'll shrink even more.
Another thing I've been doing lately is going to Goodwill and buying wool sweaters. They felt up quick and then you have this nice piece of fabric for about the price of one skein of yarn. Way cool. I'm working on some cuff designs with my large glass disks. It's amazing what you can do.