In PractiTest we strongly recommend using filters rather than folders.
There are a few reasons why you would want to use filters. First, with filters, you can build a much more flexible structure. An entity (requirement, test, test set, issue), will automatically reside under a filter once it meets its criteria. With folders, entities need to be cloned in order to appear under two different folders. Also, by deleting a folder, you will be deleting all entities that reside in this folder as well. With filters, on the other hand, the deletion of a filter will not affect the entities that appear under it.
An additional reason for using filters rather than folders in PractiTest is reports and dashboard items. In PractiTest you can create reports and graphs based on specific filters, and therefore get a clearer view of your efforts, sliced into relevant pieces of your data.
For more information about filters, visit the following pages: