If you are at a restaurant with a cloth or very sturdy paper napkin:
Don’t unfold it and cover your lap. It’s not an apron, after all, and what you’re communicating is that you’re not competent enough in using silverware to keep food from splattering on your clothes. Definitely don’t tuck it into your shirt as a bib, unless you wish to be treated as an infant for the duration of the meal.
Keep it folded neatly on your lap. When using it, unfold it and use the fold for your lips. The goal is to keep the used part of your napkin unseen. Your neighbors on either side of you at the table would rather not see stains of the marinara sauce or blueberry compote spotting your napkin.
Dab, don’t wipe or smear. Wiping may have the unfortunate effect of getting the food onto the rest of your face and damaging your lipstick (if you’re wearing).
If you need to leave the table momentarily, put your napkin on your seat. Don’t put the napkin on the table. Putting the napkin on the table is a sign that the meal is over and you’re ready to leave. Place the napkin neatly folded on your seat; don’t toss it down unceremoniously. When you are leaving, put the napkin next to the plate, not on it.
Don’t blow or pick your nose or clean your teeth with the napkin. Go to the bathroom if you need to do that (and remember to put your napkin on the seat).
If the napkin falls to the ground, it’s perfectly appropriate to ask the waitstaff for another one.
If someone spills a beverage on the table (hopefully not you), it’s alright to use your napkin to try to help clean it up as you flag down the waitstaff. It is a minor emergency, after all, although it would be preferable to get a fresh napkin. However, if the beverage spilled on someone else’s clothes, ask the waitstaff for a napkin or get one nearby. Don’t try to clean off the iced tea on someone’s blouse with your chocolate mousse-tinged cloth.