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I do wish there was a way to set up folders (something the Bookeen folks said they'd be adding to their device eventually), but it's not the end of the world.
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You can set up Groups which work the same way as Folders do. You have to play around with it to get the hang of the groups but they do work. However it appears that the group only works within each storage medium. I have to keep playing with it to figure out if there is a better way or I am overlooking something.
I will warn you that the more books you keep on it the slower it becomes when syncing up and I have had some issues with error messages when I pull one of the cards out.
But half the fun is in learning something new.
Remember that if you have a Baen book you can download it again with the text format.