I've never understood this either. I dig me some hanging folders. I use them to hold the manila folders, but there are some who hold the actual contents themselves, and are identified by the little plastic tab. There are only a couple like this, and they generally are very full with lots of more random-sized papers (the main one that comes to mind is the "receipts" folder).

Birwin's point #3 is the key for me. David's manila-only method is great for him (he's a hell of a lot more organized than I am) but I would be a basket case with that setup - unless maybe there's a different drawer setup that would make it work for me without the sliding thing happening.

Other than a couple of folders like "receipts" above, I use manila folders in hanging files. There's no categorization to the hangers, their job is just to keep the manila folders floating upright in peace. When one gets too full - either because the population of manilas is too high, or the manilas are getting too full, I'll disperse the contents more evenly and get everything back to how it should be. Works fine.

Just my $0.02.