Simply put:
Documents -->
Articles > Arylettopia, Friend Stuff, Lyrics, Personal, School, Story Stuff
Chat Logs > MSNLogger, Omegle, PMs, Trillian
Misc > CSS and HTML, dp_pokecry, images, Phone Stuff, Voice Clips
Cold Memory
Themes
Pictures -->
Amisc Pictures > bw-sprites, HGSS Sprites, Others' Art, Screenshots and Scans
Avatars > Facebook, In Progress
Backgrounds
Drawsborough > Arylettopian Artwork, Digital
Real
Music -->
Artist
Pending
Soundtracks
Video Games
Pretty much, I use the default Documents folder. This is where I keep anything that's written, as a rule of thumb. Split into more folders such as: Articles (featuring stories of mine, notes on stories of mine, lyrics, school things, and an RP project that is so vast that it has a folder to itself), Chat Logs, (MSN chatlogs, mostly. I like to hoard them obsessively.) Cold Memory (don't ask), Misc (other stuff), and Themes (themes for the colours of my computer, desktops, etc). A few of these folders have even more sub-folders to narrow it down even more, but I won't go into much detail on that. I seem to have this huge fetish for them for some reason.
Then there's Pictures, again the default folder. I have Amisc Pictures (misc. things, usually gifts that people have drawn for me or random photos and screenshots), Avatars (my avvies), Backgrounds (for my desktop), Drawsborough, (features most of my art, all of the stuff unrelated to aforementioned RP project) and Real (real life photos). Then there's my Music folder, which pretty much has a bunch of songs all in one place except for notable albums/artists (usually soundtracks of movies, anime, and video games) that I have a lot of tracks in which case they have their own folders.
Not really too organized, but not extremely disorganized either. I also tend to have extremely descriptive and relevant file names. Oh and no, I don't have a smut folder.