Someone correct me if I'm wrong. In Leopard, Snow Leopard or even Lion, you can't just create subfolders in the Applications folder and then drag those to the dock in stacks? The Applications need to stay in the installed hierarchy of the Applications folder all in one big list?
I would prefer to put a stacks by category in the dock on the left side, which I think is how Steve originally previewed them in the first preview of 10.5 Leopard. But I think there was an issue with how that App would show when running (would the stack light up, would it jump out of the stack when you launched it etc.) so I think they scrapped that functionality. I still wouldn't mind having them by category on the right side.
At one point I went through the pain of entering a terminal command to hide the alias arrow, then made aliases of all my apps that I wanted to categorize and put those in folders in my user library, then pulled those folders into my dock as stacks in grid view. I left them as stacked app icons vs a row of folders, so when I opened the stack of iLife+ I would get all my iTunes and other photo/video apps. And so on. The bummer about the Apps folder as its own stack is having all the icons to all your apps in a grid, which I have come to prefer over the older list view, because my grid extends and has to be scrolled. I just want a nice visual organizable view, and while it seems like LaunchPad would achieve this, I don't like the look for iOS style folders filled with icons. I would prefer to create a separate page for each "folder" or category of Apps and swipe through them. And the stuff I rarely use would not go into LaunchPad, which is why I don't like the bug or design flaw of having them come back after restart. ** Which seems dumb since a restart in Lion should be a Resume, leaving everything how you put it, not reverting the LaunchPad back!! **