The sheet is primarily used to conceal a player's presence from the infected. At least 3 barricadedplanks are required to block vision through a window. Alternatively, a sheet can be used as a makeshift curtain that prevents unwanted zombies and survivors from seeing through a window. To do this, right-click a window with the sheet in the main inventory. After it is attached to the window, it can be pulled down, similar to a curtain.
In order to place a sheet on a player made window frame, there must be a tile on above it (i.e. a ceiling/roof).
The sheet can be torn into ripped sheets, which is a makeshift bandage, an essential first aid tool. Sheets can also be turned into sheet ropes, which can be used to rappel down from (and also up, as long as the player doesn't have the weak trait) a window.