If the goal is to organize things for easy future browsing, the folder approach works well. But, if the goal is to clearly see what the next actions are and make progress on them, it is not a good approach since the latest and important items are buried somewhere deep inside all the folders.
http://www.zim-wiki.org/ is a personal database I use to organise notes, projects and scripts. Simple cross-note linking and automatic TODO list generation are particularly useful features I use frequently. The 'database' is stored markdown-formatted files that can be easily version controlled and edited from the command line.
I've done some Zim evangelism on HN before ([1], [2]), so I'll merely link those here and mention that I'd love to answer any questions about how I use it.
If the goal is to organize things for easy future browsing, the folder approach works well. But, if the goal is to clearly see what the next actions are and make progress on them, it is not a good approach since the latest and important items are buried somewhere deep inside all the folders.