16 slot starter pack

What's the maximum storage slots I can get?
All characters have 5 available bag slots in which to place bags and these slots are located on the bottom right hand corner of your toolbar. One of them is filled with a 16-slot Backpack that everybody starts out with and this bag is not removable from the fifth bag slot. When you purchase a bag from a vendor, buy a bag at auction or find a bag after looting, you simply slot the bag into one of these four slots. These bags don't take up any additional space in your standard 16 slot Backpack since they are equipped rather than "just being another item in your inventory".

18-slot bags can be made by tailors with the approriate uber rare recipe and Onyxia also drops Onyxia Hide bags (18 slots) so you can potentially have 88 storage slots on your person. Inventory-tastic!

How are items sorted in my bags?

Bags come in various sizes and colours and how you utilise these is up to each individual player. For example you may want a particular bag colour to only hold food items or a bag to only hold quest items which can make it easier to find specific items quickly. WoW does not feature an auto-arrange inventory feature for this reason so where you place the items is where it will stay in the bag.

One of the most useful methods for organizing your items that many players use:

Leftmost bag contain essential items that you must carry. These items include your skinning knife, mining pick, hearthstone, your pet and your mount.
Second back contains quest related items.
Third bag contains raw materials such as herbs and ore and cloth go into the third.
Fourth for general loot to sell to vendors.
Fifth (backpack) for general loot to sell to vendors.
Make it a habit to regularly sort out your fifth bag (Backpack) and move items you do not want to sell into your other bags so that you do not sell them at the vendor with an accidental right click. When you loot items, if the item in question is stackable, it will stack it with an existing stack. If a new inventory slot is required, the game will always put the item in the Backpack first, and if that has no space, it will put it in the fourth bag and then the third and so on. This is why players tend to put items they never want to sell in the first bag.

Not every item takes a complete slot in your bag. For example, a quest item may stack so 10 of the same quest item will only take a single slot. With many quests requiring multiple items this is just as well. While quest items stack there are limits on stackable items, some stacks may be a maximum of 5 or 20 depending on the item.

What different bag types are there?
Bags come in various sizes, 6-slot, 8-slot, 10-slot, 12-slot, 14-slot and the largest ones are 16-slotters. 6-slot bags drop very commonly in the low level starting areas (the level 1-5 monsters) but otherwise, they are generally very rare. Bags usually drop off humanoids although they can also drop off other monsters. Some quests also give bags as a nice quest reward so be sure to do these quests.

Bags of all the sizes can also be made by Tailors, however the 16-slot bags recipe (skill 300) is extremely rare. Bag vendors in the cities also sell bags up to 12-slots in size but at exorbitant prices.

There are special bags called Quivers and Ammo Pouches which can be used to hold Arrows for Bows and Ammo for Guns. These special bags can only be used to hold ammo and they also come with a bounus allowing you to fire your ranged weapon at a slightly faster rate than if the ammunition was just in a regular bag. Thus, it is up to the player to decide whether this benefit is enough to convince him or her to commit a bag slot purely for ammo.

Quiver Bonus

You will need to drag one stack of ammo (or just right click the stack) from your quiver/pouch to your ammo slot in your character screen [Press C] and when that stack runs out it will automatically fill with another stack from your quiver/pouch. You can store a quiver/pouch in another bag but it must be empty.

Leatherworkers are able to make Quivers and Ammo Pouches.

How do I access all my Bags?
Obviously the more bags you have and the larger the bag sizes, the more you can carry on your person. You can get rid of a bag at any time by emptying it and selling it or dragging it onto the main play area and destroying it like any other item. You can also give or trade the bags away unless they are soulbound. Bags can also be mailed like most other items in the game. Bags cannot be unequipped without first emptying all of its contents so you cannot mail a bag that contains any items.

Left click an item allows you to drag it to a bag or from one bag to another. You do not need to open your bag just hover the item over the closed back and release the mouse button. The item will automatically deposit into that bag.

Right click an item and it will automatically place it into a bag. If you're at a vendor it automatically buys it and puts it into a bag.

You can access your bags a number of ways:

Equipped bags can be opened by pressing F8-F12, each key corresponding to one of the 5 bag slots.
"B" can also be used to open the Backpack along with F12.
To open all your bags together, press "Shift+B".
Many players rebind opening all their bags to "B" directly while others prefer to use the defaults and just have "B" open a single bag.