14 DAY TRIAL // The feature introduced yesterday by the Google Docs and Spreadsheets team has been the talking point for many in the last month, just because a member of the dev team mentioned it on the go while talking about something else, it doesn't really matter now what exactly, just that it was enough to have people up in a sort of a thought riot, debating the possibilities and hoping for solutions to each and every problem or inconvenience that the absence of sub-folders might have created.
The "riot" was also internal, many Googlers being in dire need of the feature, up to the point that engineers from the Google Docs team got notes like the one Olga Belomestnykh mentioned on the Official Google Docs Blog: "Hi Olga: I have been trying for the last 79 hours to create a folder within a folder. Does 'Please try again later' mean it will work in the 80th hour?"
The answer at the time was "no", but all that changed yesterday. You can see that and give it a try for yourselves, the presence of the sub folders being indicated by the gray triangle that's sitting nicely next to the folders in the All Folders view.
"You can navigate your folder hierarchy by clicking on the gray triangles next to the folder icons to expand and collapse the folder contents. And if you want to move items between folders, simply select the items you want to move using the checkboxes and click the 'Move to' button in the toolbar. A widget will pop up for choosing a destination folder, or you can select the 'Remove from current folder' option to do just that", Olga pointed out.
Now, don't go into the other extreme of creating a folder for each and every document you have, that's not going to count for much, except for much time wasted. But I'm sure you'll get to balance the whole situation.