I found a solution.
I undocked Safari, email, videos, and music (hold finger on any icon until it wiggles and then all icons will move around.
I place safari, email, video, music in utilities folder since it is right there on the same page
I placed folder that I wanted to fill up at the bottom of the screen. For example, folders titled "games, music, utilities, entertainment"
Now you just swipe the pages back and forth to find the apps that you want to put in those folders.
There's another problem . . . categories. Here is what I did.
Example:
Lets say I have CNN app and Angry Birds app
Place your finger on an CNN app and place it on top of Angry Birds app. When the folder is created, the title of the folder is 'News' because CNN is news related
Try reversing the situation with the two icons. Place Angry Birds onto of the CNN app. The folder that is created is 'Games'
If you want to find out what category an icon is, thats how you can do it.