Allow color coding of folders, make folders=categories
Sifting through folders and organizing emails is very time-consuming now because you can't color code them, add icons, or visually differentiate them on the sidebar. So when you're looking for which folder to put an email into, it's hard to immediately spot it. Also, folders are limiting because if an email fits in 2 categories, you have to duplicate it and put it in both. Categories, on the other hand, seriously rock because you can quickly tell which one they are because you can assign a color, and because you can give one email multiple categories. I would love to see Outlook take the step of just having Categories, displaying each category in the sidebar (instead of the folders), and allowing each to be assigned a color. Nested folders would take the color of their parent folder unless otherwise specified. So something similar to how Gmail does it. This would save me hours of email organizing and make it easier to find emails.
Having a possibility to format the folder name in the side bar would definitely help.