I'm not sure exactly what I did but I am now able to sync my iPhone with iTunes without losing my folders. It could be a combination of things but I'm not sure. I installed the latest SDK and I am now making sure that I turn off my screen via the power button at the top of the screen before syncing. I have several folders and have yet to lose any of them after syncing. I also never click on the 'Apps' tab in iTunes before syncing. Hope this info helps.