I'm more or less doing the same thing as mgmueller.
I had a bunch of existing epub books before I got my Nook. I attached my Nook to my computer with the cable. Inside my Nook's /my documents/ folder, I created sub folders, one for each author. I copied the epubs into the appropriate author sub folder.
Now, when using my Nook, all of these epub books do appear, that is, the Nook manages to locate all the epubs even though they are in subfolder. Unfortunately, as mgmueller states, the Nook does not display the folders, it just gives you a gigantic list of all your books.
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