Others put everything on their desktop. Your file management system is probably as personal and as characteristic of you as is the system by which you sort, store, and retrieve paper in your physical office. I'm most concerned that your system works for you rather than working against you. Or worse, that you are working for it. I'm convinced that one of the main causes of problems is people's understanding of what's going on inside their computers.
Most people have great difficulty trying to explain that in words.
However, how they name, store, and manage files reveals much of their mental model. When I do a NetMeeting session, I'm always interested in what I see and how people get around and where they put things. Most people do far more clicking than they need to and are far too passive about personalizing their PC's. That's what the P in PC stands for, after all. On the other hand, when I look at how experienced users manage their files, I'm struck by how individual that process is.