Dawn,
I have my stuff organized under one big folder (DigitalDesigners) which is subdivided by designer name (ie: Thao Cosgrove, Erica Hite, etc.). In each Designer folder, I have folders for Kits, Embellishments, Alphas, Stamps, etc., you know, the way things are packaged and sold. Each package I buy is then unzipped into its own folder in the proper designer's folder according to what it is. So, if I were to unzip Angie's new Fit To Be Tied elements, its folder path would look like this:
E:/DigitalDesigners/AngieBriggs/Embellishments/FitToBeTied
Then I organize that final folder in ACDSee. This folder contains the previews, TOU info, instructions, samples, etc. as well as the basic digital files.
This way, there is still some organization on my hard drive. (It's easy for me to remember things by designer, so I have structured my basic organization that way.)
I hope that makes sense, and maybe helps you out some with your question.