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The Windows MobiPocket Reader (WMR) does not "know" about folders. If you open an ebook in a random folder by clicking on it, what it does is copy that ebook into its own single folder. I have these in My Documents\My eBooks\Mobipocket, but I think the default may be My Documents\My eBooks. Look in ? -> Settings -> Advanced for the location.
Also, when you open an existing ebook from FictionWise it will only have the DR1000's PID in it, so WMR logs on to FictionWise and gets a new copy with your WMR PID (and probably your DR1000 PID) inside it. This is then the copy in the WMR default directory (I don't think it updates the original).
The single directory layout is a hold over from the early days of Mobipocket when reading devices were PDAs.
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