I've lived in a hot, dry environment here in Australia. As the Queenslander said above, where we lived you could hang your washing around the line and by the time you got back to the start it was dry enough to take off.
I've never had washing fade badly from one day on the line. Having said that, I hang my dark blue towels on a rack that I don't leave outside all day. I often just dry them on a rack in the laundry.
Over time (years of line drying) the fading can be quite noticible if you always hang your washing the same way, so, all my other washing I turn inside out to wash and hang it inside out to dry on the line outside. And I hang it in such a way that the proper side of the item won't be in the sun (eg. I turn t-shirts inside out then hang with the back facing up so the neck scoop is 'inside' the item hanging over the line/against the line). It always surprises me how the inside of an item can be so faded, but the outside still looks fine to wear.
I don't use fabric softener or vinegar, just a fresh water rinse. I don't find things overly crunchy, but they are stiffer than my mum's washing (she is big on fabric softener and clothes dryers). She finds my towels a little brisk and I find hers sticky with fabric softener. You get used to either over time.
When hanging I give every item a firm shake as I take it out of the basket. This helps to soften them and get rid of wrinkles. They also get a bit of a shake as I taken them off the line and fold them, but it is all such a habit now I don't even think about what I am doing. :)