I used to use an SQR with a Barley bag, but didn't like it because unless the bag's bulging, the rear light is pointing downwards. Now use a Bagman (with the quick release thingy, which takes the cost from not much to a lot) which lines everything up spendidly. And the Bagman attaches to the saddle rails, rather than the seat pin, so I'm (maybe dangerously, views please?) using a carbon seat pin.
As far as folding goes, I think the trick is to fold carefully, pop the clothes in a neat pile in a thick plastic bag and put the bag on top of everything else. Get changed while you're still a bit warm (but have stopped sweating) and your body heat will sort out any creases. Pack immediately before you get on your bike, not the night before.