A few details:
Your "Notebook" is really just the folder (in the ordinary file-system
sense) that contains "all the stuff you see in OneNote". By default it's
"My Documents / My Notebook", but you can declare some other folder to be
your Notebook in Tools/Options/ Open&Save.
As Ben points out, the simplest way to create heirarchy (for separate
projects, meetings, classes, etc.) is just Insert / New Folder. This
creates a new folder (a file-system one) in your Notebook folder.
If for some reason you want one of your folders stored elsewhere you can (in
SP1) put in your Notebook folder a _shortcut_ to a folder. You can do this
in OneNote (File / Open Folder) or you can just do it in Explorer.
One reason to do this would be if you wanted to share one Folder with other
users - you each have your own Notebook on your own machine but all of you
have a shortcut to \\server\share\SharedNotes.
- Peter Engrav (MS, OneNote Dev Manager)