This is just what I was searching for. I would love to have Fences capability in specific folders, even if it can't be just any random folder. The documents folder, my Download folder, and certain other folders I have are used many, many times a day.
Basically, the usage is a desire to have a path to a large number of files be simple and consistent, but still have a visually organized system. Simple, static fences would be a great start, but I could also see a tag system, which is already built into Win 7. The problem with base windows auto-grouping of files is that it doesn't have any of the Fencing concepts, and entering a tag is a serious pain. I've seen stuff that allows entering of tags or filters in a text box right in a right-click pop-up menu, so that would be one way to stream-line tag editing on files. Also, when displaying in groups by tag in Explorer, it just breaks down the file display by simple top-to-bottom groups. A tag-group with one file in it takes up the whole width of the window. Fences could auto-nest to more compactly display.
Then if you can have a series of alternate fence layouts, such as categories of human expression for photos of faces (e.g., in an art reference folder), then a given layout of fences would show the photos organized by tags that match the fence names. (In the case of a large number of art-reference photos, 'Laughing', 'Grinning', 'Scowling', etc.) Then those same photos could be re-organized in a mouse click or two into an alternate fence layout organized by ethnicity of the face, for example. And thus I would just throw a face photo into this folder, give it some tags like, 'Hispanic', 'Laughing', 'Hook-nose', 'Female', etc. And then various fence layouts would show the photo in the correct fence, for the particular focus of that fence layout.
Also, add in some auto-fence-layouts, such as fencing by month or day created, or by 'prefix', which would use the first letters in the name that occur before a chosen delimiter character, such as '_', or by file type, etc. I noticed that photos in Win7 have attributes such as Tags, Rating, Title, pixel size, and many others.
And then, I'd also want to be able to see small/medium/large icons that show the actual pic, just like folders do now.
Of course, my wife needs this same system for our family photos.
One folder I use a lot is digital art references and photo-stock. Gigabytes of images. It sucks to use folder hierarchies to organize these because inevitably, I subdivide the contents of a folder once it gets too full, and that changes the path to the file, and also makes finding it in the future harder than it should be due to drilling down through multiple folder branches. Plus part of the organizing paradigm is the name, since the only way to organize is the file name and the folder name. But then that means even the file name might need to be changed. With a fences system as described above, I don't have to mess with changing names ever, if I don't want to, or if the name is being referred to by something and shouldn't be changed, for example. They can be whatever.
Also, it would be great to have 'secure' or 'privacy' fences. Then you could have some shortcuts on the Desktop, or files in a fenced-folder that would not be visible or accessible to a user or to a program until a security login was performed. (Including to programs via the Open Recent... interface.)
Also, what about Dynamic Fences, where a certain layout could hold a larger number of icons than what can be shown on a given desktop, but when the cursor hovers over a fence that is over-filled, it expands to a larger size so that all the icons within it can be shown at a normal size and spacing.