How to Organize Computer File Folders

I am helping a friend setup and organize her file structure on her new PC. Although I have some preferences and biases, I decided to relay on Microsoft to 'suggest' an approach they recommend. I will provide the link to the detailed Microsoft discussion, but here is a high level summary of what they recommend:

1. Use Documents (or My Documents) - easier to find, backup and keep files separate from programs

2. Define and stick to a consistent file and folder naming convention - and stick to it

3. Keep folder names short - it is better to create sub-folders like Personal > Finance > Taxes versus a long file name

4. Separate files and folders you are working on from those that are complete - reduces searching

5. Store like files with like files - photos, documents etc. (they each have a different Arrange by method)

6. Create a folder structure that can be seen all at once - if it is too complex, it will be more difficult to locate files

7. Consider storing completed documents online - Windows SkyDrive, DropBox, SugarSync are a few to look into.
For more details and examples see Organize Computer Files