[size=125][2] I have noticed that Folders can contain text and meta-data just like documents can, what is the difference between the two?[/size]
There are two primary differences between a Folder and a Document in Scrivener: Navigation and Export. They are large enough to consider them as different types of objects, but they are much more like each other than in most other applications, or the Finder — and indeed, are essentially identical, save but for a few aesthetic differences. Confusing? Read on!
The most immediate difference is in how they are displayed by default. Unless you change the preferences in the Navigation tab, clicking on Folders will automatically enable the Corkboard view. Clicking on a document will automatically display the text editor. However, this should be viewed as simply being a convenience feature. Both Folders and Documents can have Corkboards (albeit, initially empty), just as both can have text entered into them.
There is a third dynamically created type that exists when documents are placed beneath other documents, this “parent” document becomes what is referred to as a File Group, or “Stack.” The icon for it will change to a stack of documents. You might have noticed in Navigation preferences that you can set Scrivener to act as if these File Groups are just like folders. If you have chosen to leave things as default, and select that option, clicking on a File Group will open the Corkboard for it.

[size=9]The three types as represented in the Binder[/size]
If that were the only difference, using types at all would be merely a visual convention that you establish personally for your projects. However, when it comes time to export, Scrivener allows different settings to be enabled depending upon the type. For example, Documents could be exported with their text, and the Synopsis, while Folders could be exported using the Title of the folder and to include any notes from the folder’s note pane. Likewise, the dynamic File Group type can be assigned its own special privileges. Keep this ability in mind as you plan the structure of your document, it will allow for much greater flexibility in the end.
Consider the ambiguity between documents and folders to be in your favour. While you are planning your book, you needn’t worry about what should be which type. Just brainstorm at will. Scrivener provides the ability to convert items from one type to another. So if you change your mind later on, don’t worry too much, it is easy to standardise your project for export.
Scrivener 1.10 introduces the ability to see whether or not any of the three binder items types have synopsis or text data entered. Folders will receive a small icon indicating the presence of information stored in it. These are represented in order of precedence where text content pre-empts index card content.