The Torah requires that the Sisit be tied to the corner of the garment. The Poskim discuss how to exactly define the Halachic corner. Maran, at the end of Siman 11, clearly rules that the hole should be placed no more than three thumb-breadths from the edge of the garment. In modern measurements this is equivalent to 2.59 inches. The Halacha also dictates that the hole not be too close to the edge of the garment. It may not be placed within "Kesher Agudal", the length from the joint of the thumb to the nail, which is equivalent to 1.59 inches. Thus, the hole must be between 1.59 and 2.59 inches. If it is closer or further it is no longer considered the corner, and the Tallit is invalid, even B'dieved (after the fact). Therefore, when buying a Tallit, one should ascertain that the hole is in the proper range.
Over time, the edge of the Tallit sometimes becomes creased and folded, until it becomes closer than 1.59 inches to the hole. The Halacha does not consider this a problem. The corner is always viewed as though it were open and flat, as long as it was fashioned properly from the outset.
If the hole was put in the proper place, but then, over time, it widened and the Sisit slid down somewhat, it is still kosher. However, it is proper to reinforce the hole with stitching to prevent this from occurring. If one would wear the Tallit with the Sisit hanging low, it might constitute "Mar'it Ayin", and observers might not realize that the Tallit was fashioned properly from the outset.
Our Tallitot generally have fringes along the side edge of the garment. While this is done for decorative purposes, it is cause for Halachic debate between Maran and the Rama whether these fringes are counted in the measurement of the hole from the edge. While all agree that the hole may not be placed on these fringes, Maran holds that the fringes are considered the edge, and the measurement begins from the tip of the fringes, whereas the Rama holds that the measurement begins only from the edge of the garment itself. To avoid this debacle, one should only buy a Tallit that has no fringes on the corner.
SUMMARY
If the hole for the Sisit was placed closer than 1.59 inches or further than 2.59 inches from the edge of the Tallit, it is invalid. However, if it was placed properly, but the edge got "bunched up" and became closer to the hole, or the hole widened and the Sisit slid down, it is kosher.
One should avoid a Tallit that has decorative fringes on the corners.
