How can I organize iPhone apps on my home screen into folders?

This will be a feature in the upcoming iPhone OS 4.0. When this firmware is released we will update with detailed instructions. In the meantime, those with jailbroken iPhones have been able to use folders for some time.

If you iPhone is already jailbroken, the application is called Categories (now version 2.99.6) and it's available on Cydia for free.

1. Open Cydia.
2. Touch the Sections menu at the bottom of the screen.
3. Choose System -> Categories -> Install.

After Categories is installed you can run the program and use the Add button to make folders. Apps can be added or removed from folders from within the app.

One advantage of Categories is that apps can be placed in more than one folder. All of the folders you create will appear on the home screen with the chosen apps grouped inside.