I love Mac OS X, but this kind of thing bugs me
This and other shortcomings in Finder keep me from using OS X all the time. Mac OS X has so many great features, but they get lost in these silly issues like this folder sort problem. Folders and files are entirely different objects in the file system and should be treated like such. Folders/directories can contain other items, so they should be at the top. Sorry, but Windows is better with this. I know this is the UNIX underpinning, but for crap's sake, it is an easy fix. Look at Pathfinder and Linux distros that do it.
The Dock, Quick Look, Cover Flow, Spring Loaded folders, Stacks, Folder Actions, and I count Spotlight too, are all great features that would kick the crap out of Windows, but they are dragged down by the lack of completeness of OS X Finder and affiliated functions.
For example, Windows has a smooth file system path navigator at the top of Explorer Windows just like a web browser that makes it easy to see and modify where you are, type the path to complete, autocomplete, very nice, smooth, and responsive. You can right-click any file or folder and choose "Copy As Path" and paste a full path to the object in any application, great for networks and attaching files to emails, etc. In Windows, selecting any object in Windows Explorer shows you metadata at the bottom of the screen that can be very useful.
Finder has a stupid path bar at the bottom that you have to turn on as an option and it has little, and clunky functionality, double-click to change where you are in the system and that is it. No copy/paste function. Much harder to find your files.
OS X is much more pleasing to the eye and sometimes can be fun to use, but the form loses out to the function in Windows. This from a guy who loves OS X and has used it for years and years, imagine how all the switchers feel. I know a few at work who have switched back because of these kinds of issues. Apple should pay attention if they want to keep growing and retain all these new users.