Currently, if you click on the up arrow/button to the left of the Phone indicator the All Programs screen comes up which shows you all the programs in your phone listed in alphabetical order.
The way I envision it, I would click on the up arrow indicator/button to the left of Phone. it would bring up a new first level screen. This screen list will list the top level directory of your folders. In this case, Communications is one of those folders. If you click on that, a new sub (cascading) level appears showing you the contents of that folder. If that level has additional subfolders then it will show accordingly, like in the image I posted. There are 5 shortcuts in there to programs like the broswer, facebook, IM ,mail and peep, but also an additional subfolder that has grouped all the Google apps. Clicking on that, will bring forth the next cascading menu showing the contents of that folder.
Mind you, I guess this all depends if the user places the shortcuts to these apps in groups/folders. If the user doesn't then i assume the program would just list whats listed in the /system/apps directory on the phone. (At least thats what I see using Astro file manager, since I really haven't rooted my phone to see the true inner structure.)
I created numerous folders on a blank screen and placed shortcuts to all my apps within them as a temporary measure, but a program that shows them in a cascading menu is what I hope to see down the pipeline.
TS