Quote - 1. Are all of the subfolders under one of the top three folders or on the same level?

The hierarchy looks like this:

Runtime

• Geometries
• Libraries
  -- Camera
  -- Character
  -- Face
  -- Hair
  -- Hand
  -- Light
  -- Materials
  -- Pose
  -- Props
• Textures

Quote - 2. What do you mean by 'organize your content'? Anything in the Props folder must stay in the props folder, so what would I be organizing?

Quite right.  Props belong in the Props folder, morphs belong in the Pose folder, and so on.

However...

One thing vendors like to do is put the files for their products in a folder named after themselves.  These "ego" folders add an unnecessary - and often unwanted - layer of depth to the Library.  As your Library grows, you're not likely to remember whom you bought what from anyway, so you end up randomly clicking on vendor folders to find whatever item you want to use in your next project.  I experienced this first-hand when I started out and began adding content to my Library, and it drove me nuts.  You might also be inclined to develop your own method for organizing your content that isn't limited to whatever structure the vendor came up with. 

I always install new content in a temporary Runtime where I re-organize the files before moving them to my main Runtime.

For example, this is what the folder structure for Danae's Dublin character looks like (my comments in paranthesis):

Runtime

• Libraries
  -- Pose
  --- Danae (the vendor's name)
  ---- Dublin V4 (the character's name and which figure it's for)
  ----- Dublin (MAT files that don't use Sub-Surface Scattering)*
  ----- DublinSSS (MAT files that do use Sub-Surface Scattering)*
• Textures
  -- Danae (the vendor's name)
  --- Danae_DublinV4

I already know I can't touch the Textures folder, so I'm going to ignore it.  As for the Libraries folder, there are four things I'm going to do with it:

1 - I don't need or want any reference to the vendor's name when drilling down to the MATs in my Library, so I'm going to move the Dublin V4 folder up under the Pose folder, and delete the Danae folder.

2 - I have no use for the non-SSS MATs, so I'm going to delete the Dublin folder.  That leaves the DublinSSS folder.

3 - Since I already know the MATs I kept use SSS, I don't need the folder name to remind me, so I'm going to rename the DublinSSS folder to simply Dublin.

4 - Since I only have one set of MATs now, I don't need the Dublin V4 folder.  However, I do keep character morphs and skin shaders organized by the figure they were designed for, in their own Runtime, labeled Characters.  I use Victoria 4 as my primary base female figure, and have a Runtime folder with the same name, so I'm going to rename Dublin V4 to Victoria 4.

This is what my modified Runtime for Dublin looks like:

Runtime

• Libraries
  -- Pose
  --- Victoria 4
  ---- Dublin
• Textures
  -- Danae
  --- Danae_Dublin

I can now move that entire Runtime folder to my main Characters Runtime, and this is how the Pose category will look in Poser:

Victoria 4

• Dublin

This is what it would've looked like without my modifications:

Danae

• Dublin V4
  -- Dublin
  -- DublinSSS

Understanding how Runtimes work gives you the freedom to experiment and make finding your content a breeze.

• Sub-Surface Scattering (SSS) is a mechanism in which light penetrates the surface of a translucent object, is scattered by interacting with the material, and exits the surface at a different point. The Dublin character can use SSS to make her skin appear more lifelike.  It also comes with MATs that don't use SSS, which is what I deleted.