I find the report folders cumbersome and certainly not global. If you organize them, they're only organized for you. I try to use a hierarchical naming convention beginning with whom the report is for, like "ADMIN | report name" or FINANCE | report name". I think this is more like the gmail method of tagging and searching rather than tucking it away in a folder. Except for tags I just use the name.
I have begun using more Filters and Views and less reports as well. If it's in a dashboard, I'll create a report so the user doesn't have to do anything. If it's a free-standing report, I lean more toward Filters and Views to modify the report rather than a new report. I've been able to significantly cut down the report numbers this way, so much so that we only have one user report with about a dozen views and filters for different functions.
I've got my head in the sand on this one because‚Äîdaunting. I have been trying to use prefixes like "TEST" and "Audit" for certain types of forms, but nothing beyond that. The problem is while I create most of the reports, there are some owned by two other co-admins, our original WF deployment specialists, and at least one WSA.
The whole "ownership" problem (i.e., we really think SysAdmin-created reports should be "owned" by "the system" and not a particular user‚Ä¶or could be assigned to such a proxy setting) keeps me from digging too deep right now with my limited time.