Please do not take this as semantic hair splitting, but a core part of unix philosophy is that everything beyond core functionality is provided by separate applications. (Some of these may be large and feature rich.) I think what you are asking is that the ability to manage desktop icons be seamlessly integrated into the desktop application. Nokia seems to have decided that this functionality to too confusing or error prone. They are not alone. See Amazon Kindle forums where users have been loudly and frequently begging for folders for years. Fortunately for n900 users, only some simple and easy text editing is required. It is almost almost always much faster and much easier and much more portable to develop this sort of application. Developing a good GUI application takes longer and requires different additional skills, which often means different people. It may be that a great GUI developer does not know the name and format of the files. This is what makes open development communities great. (And, in actuality, fast.) I am grateful that Matan has provided the necessary information to the community. It is three years and counting for Kindle users, less than a month for n900 users. You are watching discoveries nearly as they happen.
I prefer pyGTKeditor over leafpad since it supports syntax highlighting which makes things more readable, it also supports portrait mode which is handy if you just want to view the files, as well as hildon autocomplete. the default language for syntax highlighting can be changed by clicking on the title toolbar and clicking on settings. from the commandline you can access pygtkeditor in the same way as leafpad. pygtkeditor /etc/xdg/menus/hildon.menu then for syntax highlighting choose xml or something similar from default language and this will highlight the tags.. if it doesnt highlight the first time, reopen the file after the language change.
The <Filename>'s in the Include section set the icons to display, so you can rearrange them or remove the ones you don't want. Adding more Menu sections will add folders (the one there represents the More..). Replace the OnlyUnallocated/ and All/ with a list of Filenames for the apps you want in the folder (see the files in /usr/share/applications/hildon).
In every menu section there is a line <Name>. Make sure it is different for each menu section. There is also a line <Directory>. Change the name. The original is applications.directory. In a menu I created I changed to my.directory (for example). Then I copied the file /usr/share/applications/hildon/applications.directory to the file /usr/share/applications/hildon/my.directory. Then in this text file I changed the fields Name= and Icon=.
don't quote me on this but to create an icon I think you need to create a 48x48 .png image e.g. games.png and save it to /usr/share/icons/hicolor/48x48/hildon/ then where it says Icon=general_applications change it to Icon=games without the .png I remember a post by archebyte outlining this method so credit goes to him.
also, a folder icon most likely already exists so browse through them to see which you can use instead of having to draw one. to browse through them I recommend you open the default web browser and type // in the address bar. you can then navigate to the icons directory and view them right there in the browser. as you probably already know you can quickly get to the icons in the browser by putting this in the address bar file:///usr/share/icons/hicolor/48x48/hildon
I've used "general_folders.png" which was already available at /usr/share/icons/hicolor/48x48/hildon/. Now it looks better. Well, I like this folder icon better than what it was before.
They're maemo and MeeGo... "Meamo!" sounds like what Zorro would say to catherine zeta jones... after she slaps him for looking at her dirtily...