Properly color coded folders can prevent you from accidently deleting important system folders or help you visually group folders by category without having to read the tiny folder names.
For instance, you can make all your music folders green and XP system folders as bright red. So the moment you see green, you know that there's music inside and if you see red, it's a warning to stay away from that folder.
Customizing folder colors is very simple. Download and install iColorFolder, a free Windows XP utility that lets you customize the color of any file folder.
Now though Windows already lets you change folder icons, iColorFolder is even more useful since it changes only the color of these folder icons. To use iColor Folder, right click any folder and choose any custom color.
iColorFolder | Download Link [via GottaBeMobile]