This is a schematic I made up showing the threads drawn for folding and stitching. You do not need to draw threads for the fold lines but I find it much easier than trying to follow one thread line with a hot iron all of the way across a piece of fabric.Pulling out a thread gives you a clear pressing line. Just be sure not to count it into your hem...my hem was eight threads so I counted out eight threads from the line of drawn thread for hemstitching. Then I pulled one thread. Then I counted eight more threads for the back of the hem and then I pulled one. I counted four more for the turn under to hide the raw edge and then I pulled a thread to make a clear cutting line.
Here is the fabric with all of the threads pulled out.
Here I've folded side one and pressed it. I folded the raw edge over on the first withdrawn thread line and pressed it, then I folded on the hemline, the second withdrawn thread line, and pressed the first fold so it just meets the withdrawn thread for hemstitching. I don't want to cover or obscure this line.
I've opened up side one so I can fold up side 2. 
I miter the corner. After folding and pressing both sides, I open out the corner. I trim off the tip of the corner to reduce bulk and fold it diagonally so the fold matches the withdrawn lines for the raw-edge fold on both sides (an exact 45 degree angle without having to measure!). Once that is done, when I fold both sides back in place on the fold line. The corner will now fold up to meet in the corner on the diagonal. As I stitch around with the hem stitch, I whip or tack this diagonal line to hold it in place.
This is the back side folded up. This is the side you stitch from. Bury you thread knot (I do knot this thread) inside the folds.
I used the same perle cotton I used for the needleweaving but it you want a really invisible hemstitch, pull warp threads (not the cross threads, weft, but the stronger lengthwise ones) from a scrap piece of fabric and use them to do your stitching. It works beautifully.
This is the front, before stitching.
And this is my secret weapon, a simple spray bottle with plain water. Especially for a sized fabric like unlaundered Hardanger or linen, I like to spritz it with water much more than using steam. I use a dry iron. I didn't even need to pin the hem at all as I stitched it on this runner. Iron the fabric on hot until it's completely dry.
Part two tomorrow.
