Windows 7 adds a new feature called "libraries". Libraries allow you to add quickly group folders and files together. By default, you start out with5 libraries.
- Documents: Personal Documents and Public Documents
- Downloads: Personal Downloads and Public Downloads
- Music: Personal Music and Public Music
- Photos: Personal Photos and Public Photos
- Videos: Personal Videos and Public Videos
When you open your user folder off of the start menu, you are automatically taken to a folder listing your libraries. This can be a little confusing to someone new to Windows 7 if they try to create a new folder while they are in the library.
The key is to realize that you are in a libraries and not in a real folder. Before you can create a new folder, you have to be inside of a real folder.