There is alot of interest in creating desktop folders so I thought I would post these links to make it a little easier on everyone.

There are two versions of Folder Organizer

Folder Organizer $1.42

Folder Organizer lite Free

The biggest differences being that the paid version does not have ad support and also adds the following features:

hierarchical labels
direct folder editing
manual sort of items in a label
widgets with 5 items in a row

Here are some step by step tutorials for using Folder Organizer. They should help get you started wit the basics. But feel free to play around and experiment. There are lots of options.

How to create a home folder | Folder Organizer

Change label icon | Folder Organizer

Change app icon | Folder Organizer

Hierarchical labels | Folder Organizer