A new folder? Are you getting organized or something? Slick.
To create a new folder, find "My Folders" in the folder list on the left side of your Yahoo Mail page. "Add" is to the right of "My Folders." See it? (Be sure you've got the right one: there's another "Add" just above it, next to "All RSS Feeds." This "Add" is how you add news and blogs and other content to the RSS pull-down menu in your folder list, which makes it easy to keep up on stuff right from your Yahoo Mail window.) Anyway, find the "Add" next to "My Folders." Click it.
A new blank folder pops into the folder list under "My Folders." See it? It's called "untitled."
Click "untitled" twice, highlighting the text and placing it in a box so you can type a new name for it. When you're done naming it, click outside the box to de-highlight it. Now you can drag and drop messages into it from your Inbox, or from wherever the messages are that you want to put in this new folder of yours.
With Yahoo Mail, you can make up to 200 folders.
There's no way—yet—to create a folder within a folder. We get a lot of requests for this feature so we'll be making it available in the future.