When you have a bunch of programs and a hours of viewers, it would be nice to be able to store shows in folders. For example, there could be folders for "mom", "dad", "sister", and "brother" and that way each person could see their own shows more easily.
Others might want to use the folders to organize shows by type. One could have folders for family shows, reality, sci-fi, action, sports, etc. This makes it easy to choose a show to watch. In the mood for action? Want to watch Bionic Woman, Lost, or Burn Notice? Need to find something for the hour of TV the kids get before bed? Let them choose anything from the family folder.