jamesbeat, the whole point of the Browse by Folder is to allow rapid access to thousands of books because the Sony does use a database... and it's so inefficient that it effectively grinds to a halt on a few thousand books... I found that getting to 3k and above the rescan (to update the database) got to 4+ hours and meant that adding a few books required doing before going to bed so I had use of the reader back the next morning.
I do store my books by author folder on my SD card and now have nearly 25K on the card and scanning for an author and book takes a few seconds and a couple of seconds more to transfer to internal memory... way faster than Sony's method and even faster than finding a paper book on my shelves in the house... I've got a pocket library... and it works!!