This console application allows you to generate a folder structure within a document library. It will create a folder in the root of the document library using the current year-month (e.g. "2008-05").
It then reads an XML file to determine what sub folders to create under the year-month folder structure. The XML file can also specify that a specific folder should have specific permissions applied to it.
The concept is that you would schedule this application to run on your sharepoint server each month. The current design requires a separate copy of the application & configuration file for each document library. If there is interest, this can be updated to affect multiple document libraries.
It is good practice to limit the number of items in a particular folder to less than 2,000. This application can simplify maintenance and ensure consistency when working with large libraries. When working with a small set of documents consider using metadata exclusively for categorizing files.
To read more about using folders in SharePoint Document Libraries, read Mikhail Dikov's blog post at http://www.mikhaildikov.com/2008/05/sharepoint-folders-need-more-love.html