iPhoto 5 will include the ability to use nested folders for albums and slideshows. I have heard iCal will have this same functionality for calendars.
Hopefully this means Apple will at least consider putting nested folders in iTunes.
This would be great for those who either have tons of playlist or for those who just like to keep things a little more tidy and organized (I fall into both categories).
If you would like to see this feature implemented, please let apple know:
http://www.apple.com/feedback/itunes.html
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