Forgive me for taking a moment to extol the virtues of Gmail. I appreciate it a lot more since coming to MIT, because I get about ten times as much email as I did in high school. And no, I'm not getting paid for this. But people here complain a lot about the volume of email, and if more people would use Gmail then the amount of sniping would drop five-fold.
Gmail has tags instead of folders. Tags are so much better than folders! I have two major ways I categorize my email: by where it was sent to (me directly, my MIT email account, certain mailing lists) and by why I should save it (it points to a resource, it contains someone's contact info, it's one of those "please retain this email for your records" messages). So, to a first approximation, pretty much all the messages I save falls somewhere on a two-dimensional grid. A lot of messages fall in more than one place, and there are miscellaneous tags, and all kinds of stuff you just can't do with folders.
(I'm always a little annoyed by blog platforms that say things like "This entry filed in [list of tags]". They're just trying to pretend tags are the same as folders, no idea why. Inertia perhaps? Bah! Embrace the tags for what they are!)
Since Gmail has tags instead of folders, to get things out of your inbox you just hit "Archive". This puts the conversation in a big all-purpose bin, and you can find it later by searching for text, tags, or sender.
There's also a really nice filtering setup. For instance, I have all my email from my MIT address forward to my Gmail, and I have Gmail tag it `MITmail' so I know what was sent to where. I subscribe to a lot of mailing lists, and I have many of those automatically tagged as well. One list in particular, the Reuse list (for recycling / handing off old computers, furniture, unneeded coupons, etc etc etc...), gets a lot of traffic, and I don't generally want to see Reuse messages in my inbox unless I've got free time to go pick something up. So I have Gmail do two things: tag the messages `reuse', and archive them directly, so they don't appear in my inbox and get in the way of more important things.
On top of tags, you can also mark converstions (or individual messages) with a little yellow star that shows up by the subject line. This is really helpful because I keep several types of messages in my inbox (instead of archiving them): reminders for events, reminders for things I need to do, and messages I'll need to refer to within the next two weeks or so. Reminders get starred, so they stick out visually and I actually get reminded of them. References don't get starred because I only need them when I'm looking for them specifically.
Probably the best feature, though, is this: Back-and-forth emails with the same subject line are organized into conversations. This is just fantastic. It keeps everything related to one topic in one place, instead of having individual messages in several threads scattered randomly throughout your inbox. You can read an entire thread on one page. If a new message appears while you're backreading the thread, Gmail pops up a little "Update Conversation" box so you don't reply redundantly. And since the whole thread is on one page, Gmail hides each message's quoted text, all the lines that begin with piles of >>>s. And you can delete an entire flamewar with one click. Can't beat that.
I know a lot of people are concerned about the direction Google is headed, or that they will end up "owning all the information in the world". Yes, there are legitimate concerns, but I think the danger is way overblown, and Gmail seriously saves me a lot of time and aggravation. (Are you listening, stupid Yahoo email account that I keep for signing up for potentially spammy things? Grr.)