The sorting tool is found in: " Waypoints "-->"Sort/prioritize waypoints"

Sort alphabetically

When you use Sort alphabetically, the waypoints are sorted alphabetically by waypoint / cache name.

Sort by distance from start

When you use Sort by distance from start, the waypoints will be sorted by distance (in direct line) from the first waypoint.
Text waypoints (waypoints without coordinates) will all be at the top when using this tool.

Sort manually

Sort manually by dragging the rows and drop them where you want them. You can also select groups, and move entire groups.

Sort automatically

Read more about automatic sorting here.