STOP indeed. Mixture, there is absolutely nothing wrong with a massive, long list of folders with dated files. Picasa will NOT sort your folders for you, and in fact encourages "just chuck 'em anywhere" and then put them into Picasa "albums". Nothing could be worse if/when you want to go to some other program (or indeed keep them backed up).
Amok EXIF Sorter is the killer photo sorter. It will sort any Jpegs by folder and then date-time the file name. I use it to download and sort pics from my phones, various cameras video and still, as well as to send the pics over to my other computers on the network. It's brilliant but simple.
THEN use Picasa-great for photo viewing and basic editing-to view your pics.
Strict folder/pic management is the
only way to collect and look after lots of photos. I have 23k of pictures, growing at over 100/month, all arranged in neat, dated folders. With AMOK and Picasa, it is a cinch to manage.
PM me if you need some help with Amok. Oh and yes, it'll grab all your folders and resort all your pics into dated folders.