I have two device: iPod touch and iPad. All of them use the newest OS.
I have a folder in my Windows, call it c:\mybook. I put all my pdf books into this folder. No nested categorizing folder for sure.
I import these books from iTune using CTRL+O (add file to library). Then I sync my iPod touch. From within iPod touch, I make collections based on genres such as Physics, Math, Biology, etc. I move each book to the proper collection. All books have been arranged and I am happy.
Next... how to make the arrangement in iPod to be reflected to my iPad? Hopely using the simplest method. For sure, my iPad has been restored to default factory without any data now.