It's also easier to find related messages and to remove a label without using the drop-down.
The feature was previously available as a Greasemonkey script. I wonder if all scripts written by Mihai Parparita will become Gmail features.
{ via Blogoscoped Forum }
Update. The post from Gmail's blog that announces this feature says something interesting: "We actually kinda like folders. In fact, we're doing some work to add some folder-y-ish functionality. Stay tuned." It will probably involve some drag-and-drop.
Update 2. Gmail seems to have fixed the performance issues and doesn't cache messages so aggressively.
