Use Folders to Organize IE Favorites
Adding folders in which to store your Internet Explorer favorites is a great way to organize your bookmarked websites by groups or categories. To make a folder for your favorites in Internet Explorer 7, cick the Add Favorites button on the IE toolbar and select Organize Favorites. If you are using IE8, click the Favorites button on the toolbar. Click the drop-down arrow next to Add to Favorites and then click on Organize Favorites.
The Internet Explorer Organize Favorites dialog box will open. Click the New Folder button to add a new folder to your favorites list. Type in a name for the folder and press the Enter key. Repeat, making as many folders as you want.
To use these folders as Internet Explorer favorites organizers, click on favorites already in your list and drag them to the appropriate folders, or click on favorites link you want to move to a folder, click the Move button and select the folder to which you want to move it.
You can rename an existing favorites folder from the Organize Favorites dialog box. Click on the folder you want to change and then click the Rename button. The folder's current name will become highlighted so that you can type the new name right over the old one. If you want to delete a favorites folder and all of its contents, click on the folder to select it and then click the Delete button on the Organize Favorites dialog. When Internet Explorer asks if you are sure you want to delete the folder, click Yes.