Anyone care to explain "Folders" to me?

Instead of all your audio tracks being saved in one central folder, they are saved in an audio folder off the project folder.

Also useful if you want to edit everything together. Could be a copy past operation. Could be if you've selected multi track grouping while recording in comp mode, then you can comp a best take of say a drum part easily.

To get an idea of track folders usage, here are a couple of examples for you;
 
1) You have an instance of Kontakt with several orchestral instruments in it. You have the instruments routed out to 16 separate audio tracks and you have a load of midi tracks for all your arrangements. You also have a pile of other tracks for other stuff and you want to better organise everything. You can create a track folder in track view and name it Orchestra. Now you can drag all your Kontakt orchestral midi and audio tracks into it. The folder can be closed now, hiding all the orchestral tracks making it easier to manage the rest of your project. The Kontakt tracks all still function as they should.
 
2) You are recording a live band. You have 8 tracks for the drum kit and loads of other tracks for the other instruments, including several guitar parts and a load of layered backing vocals. To better manage things in track view, you can put all your drum tracks in a folder called Drums, all the guitars in a folder called Guitars and all the backing vocal tracks in a folder called Backing Vocals. You can now close the folders up and have a less cluttered track view. You can reopen a folder at any time to work on a track within it.
 
That's the basics of track folders.

I use the track folders a lot for organizing and I also have some track templates with folders set up for quick idea recording.
 
I have a template series with gtr DI/wet, Vox dry/fx and labeled Take 1,2,3 etc.
 
Drag take 1 into a new project and go.  Close the take 1 folder and drag take 2 in and record more.  Go back a few days later - easy to click takes on and off via the folder to listen and they are already labeled so I remember what take they were!
 
 

I find track folders useful for three reasons. 
 
Suppose you put all your background vocals in a Harmonies folder, all your drum tracks in a Drums folder, all the guitar tracks in a Guitars folder, etc.
 
1-You can mute or solo (or archive) everything in a folder at once.  For example, if you just want to listen to the drums for a moment, you don't have to solo each drum track: just solo the folder.
2-As mentioned above, if you are just working on certain instruments (like the guitars), you can collapse the other folders so they are not taking up room on the screen.  With some consoles (like the VS-700) you also won't see the faders for the collapsed tracks which makes it easier to focus on the group you are working on.
 3-You can rearrange your tracks just by moving a folder.  For example, you can put all the drums at the top, then the bass, then all the guitars (or however you like it) just by dragging the folders.  I have a sepcific order, but it may not mean anything to you. People who worked on large analog consoles with tape machines usually have some order of tracks burned into their brains.
 
 
I usually put whatever is in a folder in a separate bus, but that's a separate discussion.

Wow... All I can say you guys rock!!! 
I can't thank you ALL enough!
Though I have yet to try out making folders , I feel like I totally get it now!
I'm just starting out trying to use a "real DAW" and some of the examples given are well, over my head to say the least.
I come from multi-tracking on a Roland MV-8800 (similar to a MPC-4000). 
I haven't made a proper MIDI track yet. All my tracks (so far) are Audio or VST Plugin instrument tracks.
I guess I'll start a new thread about MIDI tracks next, lol.
Thanks again everyone!

You guys rock!
Made a folder for my synths, called it "All Keys" and its great! more space! 
With 28 tracks so far in the project, I can almost see them all at once!
Thanks again!
Peace!