Andre has written a post similar to mine that explains how Contribution Folders work. Funny how people still seem to misunderstand the concept. Oh yeah, his post is in Portuguese (use the Google translate thingy.)
His post: http://andrealmar.wordpress.com/2010/08/24/contribution-folders-use-com-moderacao/
My post: http://webmonkeymagic.blogspot.com/2010/01/contribution-folders-same-same-but.html
It's important to note that they are virtual folders, so they may look like folders on your desktop but they work a bit differently. Also you are crazy to use them on a consumption website... lol I can say that because I worked on a site that did just that (it probably still does) and it made sense at the time but I wouldn't do it like that again.
I was recently asked in a series of emails to figure out how to display the user's folders as a site map. I tried valiantly to explain that a site map on a website is unrelated to contribution folders... they insisted they understood but wanted the solution anyway. Funny stuff.