It’s a personal preference whether you use folders, collections or a combination of both to organize your workflow. Most of the photographers that I talk to have some type of folder structure to help them organize their images. Some common example are naming folders by date, client names, location or events – with all related files stored in that folder.
Then, to combine images into groups (without moving the originals from their folders), they create collections. For example, they might have a collection of their best of the portraits for 2011 for your marketing pieces, or a collection of the best bird photographs from across North America – these images are still in the original folders, but can now also appear in a collection(s).