I would like to see subfolders added to Google Reader. I think it is a great RSS reader and I love that I can have it ready to go anywhere just be signing into Gmail. The iPhone version rocks.
My suggestion is that you be able to have subfolders for your feeds. For instance I have "News" folder. I would like to be able to add subfolders to that News folder like "Political" "National" "World" "Tech" etc.
It would make it easier to look at all my tech feeds if that's all I wanted to read at the moment and also make it possible to catch up on all my news feeds, regardless of category, if I wanted to by selecting the main "News" folder.
I think it would be helpful if we could color-code feeds and folders in Google Reader. For example, I could make all feeds inside my Local News folder green, my Facebook feed red, and everything else would stay the default white/blue color. This would help me find what I want now. Obviously everything I keep in Google Reader is important to me, but maybe right now I am just looking for local news. Color-coding seems to be just the thing facilitate this at just a glance.