Not sure as to the value of the folder numbering. I decided that after every 100 shots (or some number) the camera makes a new folder. If I MOVE my pic's from card using a card reader, even though the pic's are erased the folder number is still there. I often Format the card just to get rid of the empty folders. It has had no effect on the camera's continuing to number folders in sequence...it'll pick up where left off even if the card is blank. Or that is how it is on my S2.
Bill, Pentax K100D, 18-55mm, 70-300mm