Open up two inventory windows and drag stuff from window to window. This allows you to position a folder in view in one window, while dragging stuff from other folders in to it.
Work from general to specific. Clothing to clothing folders, perhaps split up in to shirts, jackets, pants, footwear, accessories, or even a full folder for full avs or sets.
clothes goi in a clothes folder - good for the food stuff, bad for the, well, shoddy stuff. textures for, well, textures but split the feckers into categories. building things in a folder splitminto categories again and so on. oh, building tip - once you make your humongous temple only to find you can't link it and don't have a rezzer script, select all the pieces and TAKE A COPY. gets round the pieces too far apart thing and handy for taking builds in progress.
if your objects folder gets too much to cope with but can't bring yourself to delete it, then make a new folder , call it ' old objects' or 'unsoorted objects' or something and chuck them all in there.