What a Folder View really amounts to is a mini-desktop which you can customize to your liking, adding local or remote files, folders, icons, and links to URLs, and devices from any place on your machine and network or the Internet. This flexibility lets your ingenuity run wild: For instance, you can create a Folder View of frequently used documents or applets, a listing of files on an FTP server, or a kind of To Do list that consists of the files you want to work on. In upcoming versions of KDE, you should be able to add the result of natural language searches, or the results of tag searches as well. Instead of having one desktop per workspace, with Folder View you can have several -- all of which are fully integrated with the regular desktop, and which you can edit, delete or drag contents to and from exactly as you can in the plain desktop.
You can even take the Desktop Folder View and expand it to fill the entire desktop, recreating the Old Skool desktop. In upcoming versions, you will be able to make this change through a graphical interface, but now, according to Aaron Sergio's video on Folder View, you can make the change by editing ~/.kde/share/config/plasma-applets.rc in a text editor and replacing the line plugin=desktop with plugin=folderview.
The power of Folder View is as simple as it is obvious. However, the first incarnation of Folder view in KDE 4.1 is going to be slightly limited. You cannot position icons for yourself in a folder view, nor can you set a background for each Folder View that is separate from the desktop wallpaper. Considering the trouble that KDE met with 4.0, you might have expected the project to be more careful about introducing new features when they are only about 85 percent complete, but apparently not.
Also, although not planned, a file manager-like Detail view might also be useful, especially for Folder Views that contain content from many different sources. Currently, too, using the miniature icons to resize a Folder View resizes everything -- not just the container, but the contents as well -- meaning that any resizing must be proportional to avoid distortion. And, so long as I am dreaming, how about the ability to minimize Folder Views, and a panel applet that lists them?
Furthermore, I sometimes wonder whether Folder View, for all its usefulness, isn't implemented with more elaborateness than necessary. Rather than having Folder View listed among the applets in the desktop toolbox, why couldn't the nature of folders on the desktops simply be re-written?
Still, for all its current incompleteness and its wonky implementation, Folder View is a feature whose usefulness fully justifies the excitement with which it was announced. Let's hope that it doesn't get lost amidst the rumors and misconceptions.