denodan,
Since I don't use file management software like Calibre or iRiver Plus 4 to copy files onto my Story or remove them -- I just use Windows Explorer -- I have manually created folders within the "Book" folder to help me group books in a way that seems logical to me from a file explorer window on my PC. I have created a couple of folders for specific authors, and a couple of others where I've put series of books (e.g. a trilogy) onto the device.
I'm using firmware version 1.71, and it finds all the books in the subfolders with no problem. It doesn't display the folders -- it lists all the books in the one single-level list, all sorted into alphabetical order -- but at least it sees all the books.
And I haven't installed Adobe Digital Editions, but still have a folder called .adobe-digital-editions on my Story, at the same level as the Books folder. It appears to be part of the operating system, because i tried deleting it, and the next time my machine rebooted, that folder was recreated.
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