When affixing Sisit strings to a garment, it is customary after tying the first knot to wrap one string around the others and then make another knot. This is repeated four times for every corner of the garment, such that on every corner there are five knots with four sets of wrappings in between.
Different views exist among the Halachic authorities as to how many wrappings one should make on each corner of the garment. The Shulhan Aruch (Orah Haim 11) ruled that there should be a total of forty wrappings on each corner of the Tallit (both the Tallit Gadol and Tallit Katan). The Hid"a (Rav Haim Yosef David Azoulai, 1724-1806), however, held that the wrappings should correspond to the numerical values of the four letters of the divine Name "Havaya" (Y-H-V-H). This would mean that one should make ten wrappings after the first knot (the numerical value of Yod), five wrappings after the second knot (the numerical value of Heh), six wrappings after the third knot (the numerical value of Vav), and, finally, five wrappings after the fourth knot (the numerical value of Heh). This would result in a total of twenty-six wrappings – the numerical value of the divine Name of Havaya.
The Arizal (Rabbi Yishak Luria of Safed, 1534-1572) advanced yet a third view, claiming that a total of thirty-nine wrappings should be made, corresponding to the combined numerical value of the words "Hashem Ehad" ("God is one").
As for the final Halacha, Hacham Ben Sion Abba Shaul (Israel, 1923-1998) ruled that one should follow the position of the Arizal, and make thirty-nine wrappings, both on the Tallit Gadol and on the Tallit Katan. Hachan Ben Sion wrote that one should make thirteen wrappings after the first knot, followed by series of eleven, eight and seven wrappings.
Some people include in their Sisit a string colored with a bluish dye, which they identify as the original techelet dye with which the Torah requires dyeing one of the Sisit strings. Hacham Ben Sion writes (listen to audio recording for precise citation) that a person whose father and grandfather did not wear a dyed Sisit string should not follow this practice. Doing so gives the appearance of belittling one’s forebears, and claiming to know more about Misva observance than previous generations. This is particularly so in light of the fact that the Torah leaders of today do not wear techelet strings. It is unclear altogether whether the dye worn by some people today is indeed the original techelet dye, as this issue is subject to controversy. In any event, it is disrespectful to today’s Torah sages to wear this dye and give the appearance of thinking that one knows more than them. There are some Hassidic sects, specifically the followers of the Radzhiner Rebbe, who have a tradition dating back several generations to wear a certain kind of dye. But while for them it is legitimate to follow their predecessors’ custom, for the rest of us it would be inappropriate to wear Sisit in a way that our fathers and grandfathers never did.
God willing, Mashiah will soon arrive and show us the authentic techelet, so that we can all perform the Misva in the most preferred manner.
Summary: The proper custom for wrapping the Sisit is to make seven wrappings after the first knot, eight after the second knot, eleven after the third and thirteen after the fourth, in according with the view of the Arizal. It is improper to wear the blue dye that some identify as the original techelet, unless this was practice of his ancestors (as in the case of the Hassidim of Radzhin).