I'm curious- because I haven't tried it, but I did spend I few minutes thinking about it- surely if you were using a mylar blanket in conjunction with a sleeping bag you'd want the mylar on the outside of the bag?

The mylar, being impermeable, would protect the sleeping bag from water (either rain, or drawing up from the ground you were lying on), and also protect against wind blowing through the sleeping bag and wicking away heat. Meanwhile, with a layer of insulation (the sleeping bag) between you and the mylar you would allow air to circulate around your body, and you would keep your (hot, sweaty, evaporating) body away from the (cold) outside, thus preventing condensation. The heat reflecting properties of the mylar are a bonus, but the wind- and waterproof properties are what's important.

Again, I haven't tried this, so I could be talking through my hat...

A