How to Create a folder in a library + SharePoint 2007

When we creates a document library in our SharePoint sites, The most important thing is manage the files by creating appropriate folders by using proper naming conventions.

Microsoft has provided a detailed documentation on this: 

If you have several types of documents or diverse content within a library, you can create folders to help you organize the content.

If the library is not already open, click its name on the Quick Launch.

If the name of your library does not appear, click View All Site Content, and then click the name of your library.

1. On the New menu , click New Folder.

Note: The person who created your library may have specified that folders cannot be created in the library. If this is the case, the New Folder command is not available.

2. Type a name for the folder, and then click OK.

Note: If you have multiple libraries with folders and the people in your group like to browse a library as they would browse their hard disk, your group may want to enable your site to use the tree view. You can use the tree view to expand, collapse, and easily navigate folders. 

If you have permission to design sites, you can enable the tree view in the Navigation options on the Site Settings page

Reference: http://office.microsoft.com/en-ca/windows-sharepoint-services-help/manage-permissions-for-a-list-library-folder-document-or-list-item-HA010021564.aspx?CTT=3 

If you have any queries/questions regarding the above mentioned information then please let me know. I would be more than happy to help you as well as resolves your issues, Thank you