Manually organizing that many photo in folders is a real pain. I won't do it. What I'll do is this: Most photo organizers will by default read the EXIF and organize your photos by date automatically the first time u use it. This way a large part is done automatically right of the bat. Then I will go and tag the photos with keywords. E.g., I find the folder around on the days I was on a cruise last March with my dad on his birthday, find those photos and tag them "Caribbeans Cruise Dad's Birthday". Most organizer let you batch tag a whole bunch of photos at one time, so it's relatively quick. After all photos are tagged, I just leave them where they are instead of moving them around b/c it's so easy to just search for them with date and/or keywords. It really doesn't matter that photos of the same event are scattered in different folders. I don't care, I just search for them and they will all be "united" again. Besides, some photos may fit multiple categories, so where do you put them? Like some of my cruise photos are also my Dad's BD this year, so should I put them in the cruise folder or Dad's BD folder?

For new photos I tag them right the way so they won't get pile up again.

Picasa is free and can do all these.