Yes, sorry one folder. As it is now at least on windows (xp fully updated sp3) it saves the files [ie epub lit lrf etc] in the directory of my choice with no folder. It used to tidy them all up together in a folder by author then title. Hope that makes sense.
edit: I just updated my mac mini ppc with leopard fully updated to 6.8. Before I did I convert a gutenberg book and saved it with 6.7 and then again with 6.8. The Mac does the same thing. Here's a pic with 6.8 on top and 6.7 on bottom. Hope that explains it better than my vocabulary does.