Bill,
I throw away every clay bar after each use and purchase a new one. I must have gone through a hundred so far, easily. Using a clay bar more than once will open the risk to scratching and surface marring. The only exception to that is if the surface contamination that the clay bar normally picks up is very light to non-existant, the clay can be kneaded and used again another time. As for preserving it, I really don't know because I've never kept one :wink I hear things like putting clay lube in a ziploc bag along with the clay and you'll be good. But like you, I toss 'em every time.
As for how you know when one is no good: You'll always want to start on the hood, roof, and trunk. Then move to the fenders, doors, etc.. and last the quarter panels and rocker panels. If you notice that you are picking up large contaminants like sand and dirt, first remind yourself to wash better, then toss the bar and inspect the area closely for scratches. If your bar is looking like a charcoal briquette, knead it over and as long as there is no black or rough contamination on that side - you are good to go. It never hurts to spray your hands with clay lube and inspect the bar at any time either. Look closely and if you see something embedded you do not like, you can pick it out with your finger nail and continue on. Knead it over and look for more contaminants just in case.
The most important rule of thumb to consider is that the clay bar, namely Z-18, costs something like $18.00 for two bars. For $9.00, would you risk surface marring - or - toss the clay bar and use a fresh one without worrying about risk. To me, I'd toss the clay bar and feel better not having to worry. :thumbsup