All of the CAD work on a project should be contained in a single CAD folder. I break out the CAD folder since I keep all project files in the same root folder. See this post on the Root Folder .
Keeping all of the CAD files in one folder streamlines archiving and using tools like ETransmit to send files to others. It also helps with milestone in-place archives at milestones. Just copy the entire folder to CD or DVD.
Sub folders should be used to break out work by building, area, site, etc. to keep the proper separation of work. You could also break out the folders by discipline, Arch, Mech, Elect, so on.
I try to keep folder names to a minimum length so I abbreviate as much as possible.
I further break out files by file type. This allows for quick access by what type of work you are doing.
It is easiest to just show you, so here it is.