Any iPhone or iPod Touch (or iPad) which has iOS4 now has the ability to create folders. You can download the iOS4 update through iTunes. Folders allow you to organize and quickly access apps on your iPhone by knowning the apps contained in each folder. Creating a folder is very simple, follow the steps below.

Create Folders on the iPhone/iPod Touch/iOS4

  1. Click (Touch) and hold an app until all apps are shaking

  2. Select an app you want to store in a folder and drag the app onto another app which would be in the same folder

  3. A new menu will appear where you can name the new Folder

  4. Continue to drag apps onto the new folder

As of now, you can only include 12 apps in any folder.