I group Apps according to their function. For example, my Weather apps are all in the same folder, my Shopping apps are all in the same folder, my Communication apps are all in the same folder, etc. I never have more than three folders per page so I can see my wallpaper and it feels organized.
There is no 'right or wrong' on this, but it is comfortable and clear for me- just my personal strategy.
Place your apps into folders according to what they generally serve you for.
I have FB, Whatsapp, Digg, G+ Twitter in folder named Social.
Podcasts, iTunes, Shazam, Imdb app and BBC iPlacer under Entertainment.
Maps, and Google Earth under Travel.
Google Currents, Weather, Mobile RSS, Stocks and Wikipedia app under News & Info.
All my game apps are under (not surprisingly) Games.
I also have all unneeded by me apps like the YouTube app or Safari (I use Google Chrome) disabled under Settings > Restrictions or placed under folder named Other on the second slide of my iPhone Home screen.