So I put all my apps in required folders. But the main menu default stuff like web, contacts, conversations etc I would like them to remain in the main menu and right at the start. So whats happening is that when apmefo is creating folders, the folders end up right from the start at the beginning as the first icons on the menu. But I dont want that, I'd like the other default stuff there. So when I try to move the folders away or bring contacts, web etc to the first icon by holding it for 3-4 seconds, then all the apps inside the apmefo created folder come out and become scattered. And then I have to arrange it all back again. Please help.

Still works fine for me (though I just do it from the Terminal nowadays). Are you using the ApMeFo from the repository? Or from a few pages back in this thread?

If it's from the repository, did you install one of the programs that's been known to cause it to glitch by having a space in the wrong part of it's .desktop file? (Namely, if you reflashed to PR1.3, did you install Gas-Balls?)

First thing, you go to /usr/share/applications/hildon on your N900 (either from terminal - assuming you have rootsh installed - or from something like Filebox, etc). If you have gas-balls, open gas-balls.desktop and change the line that says:
Name = Gas-Balls
to
Name=Gas-Balls

If you don't have Gas-Balls, or that doesn't fix it, then go through all the other .desktop files in there, and make sure there's no spaces before and after the equal sign in the name line.

Or you can download the latest version made by Hrw - his version already fixed that bug.