New Google Apps users quickly notice that Gmail uses labels instead of traditional folders for organizing email. Why this design decision? Put simply, you can organize and then find messages more efficiently with labels.

Here's why: a message can be tagged with multiple labels like "Project Orion" and "Budget," so you can find that message in either context down the road. With folders, you'd need to pick the one best place for that message – let's say the "Project Orion" folder – making it harder to find later if you're looking for that same message in the context of budget planning.

We hear that the concept of labels can feel foreign at first, and, up until now, the way you had to first apply a label and then archive to move it from your inbox was a two-step process. Listening to users, we heard that people wanted the flexibility of labels but the simplicity of folders.

As of today we're making it easier for you to work with labels. From your inbox or when viewing labeled messages, you'll see a new "Move to" button that labels and removes messages from the current location in one step, just like folders. To apply a label without archiving or removing existing labels, click the "Labels" button.
For you keyboard shortcut diehards, V lets you quickly move, and L lets you label selected messages...but first make sure you've turned on keyboard shortcuts.
Posted by Jeremy Milo, Google Apps Product Marketing Manager