While the folders are definitely backed up, they won’t show up when you’re restoring from a back up because the third party apps themselves need to be available on the device for that to happen.

After all, folders only exist when you put two apps together and yes, backing up a device DOES NOT mean backing up those applications you purchased from the App Store.

(You will notice that if you placed the default apps that came with your device into folders, THOSE folders will show up after a restoration because those particular apps came with your iPhone/iPod touch/iPad.)

Third party applications are stored in the iTunes library and are actually backed up each time you sync your device with iTunes.  In Windows 7, their default location should be C:\Users\[your username]\Music\iTunes\iTunes Media\Mobile Applications.  (Please don’t ask me about where files are on an XP or Vista system or a Mac. I don’t own a Mac and while I DO have iTunes on my XP partition, my primary library is with Windows 7. And no, I don’t have Vista on any of my computers.)

Now, when you choose do a back up — that is, in iTunes Windows, right clicking on the name of your device and selecting Back Up — the following will be saved (taken from http://support.apple.com/kb/ht1766):

• Contacts* and Contact Favorites (regularly sync contacts to a computer or cloud service such as MobileMe to back them up).
• App Store Application data (except the Application itself, its tmp and Caches folder).
• Application settings, preferences, and data.
• Autofill for webpages.
• CalDAV and subscribed calendar accounts.
• Calendar accounts.
• Calendar events.
• Call history.
• Camera Roll (Photos, screenshots, images saved, and videos taken. Videos greater than 2 GB are backed up with iOS 4.0 and later.)
  Note: For devices without a camera, Camera Roll is called Saved Photos.
• In-app purchases.
• Keychain (this includes email account passwords, Wi-Fi passwords, and passwords you enter into websites and some other applications. If you encrypt the backup with iOS 4 and later, the keychain information is transferred to the new device. With an unencrypted backup, the keychain can only be restored to the same iPhone or iPod touch. If you are restoring to a new device with an unencrypted backup, you will need to enter these passwords again.)
• List of External Sync Sources (Mobile Me, Exchange ActiveSync).
• Location service preferences for apps and websites you have allowed to use your location.
• Mail accounts (mail messages are not backed up).
• Managed Configurations/Profiles. When restoring a backup to a different device, all settings related to the configuration profiles will not be restored (accounts, restrictions, or anything else that can be specified through a configuration profile). Note that accounts and settings that are not associated with a configuration profile will still be restored.
• Map bookmarks, recent searches, and the current location displayed in Maps.
• Microsoft Exchange account configurations.
• Network settings (saved wifi spots, VPN settings, network preferences).
• Nike + iPod saved workouts and settings.
• Notes.
• Offline web application cache/database.
• Paired Bluetooth devices (which can only be used if restored to the same phone that did the backup).
• Safari bookmarks, cookies, history, offline data, and currently open pages.
• Saved suggestion corrections (these are saved automatically as you reject suggested corrections).
• SMS and MMS (pictures and video) messages.
• Trusted hosts that have certificates that cannot be verified.
• Voice memos.
• Voicemail token (This is not the Voicemail password, but is used for validation when connecting. This is only restored to a phone with the same phone number on the SIM card).
• Wallpapers.
• Web clips.
• YouTube bookmarks and history.

Back up data in Windows 7 is found in C:\Users\[your username]\AppData\Roaming\Apple Computer\MobileSync\Backup

So then, how does one get folders back onto the home screens again? A thread at the Apple forums suggests to restore the device from the same back up data twice in a row.

THE SOLUTION?

To do this, choose “Restore from Backup …” from the context menu (i.e. right click over your device name in iTunes), select the back up folder, let iTunes do its thing but when it starts to sync with your device, cancel it.

Once that’s done, repeat the restoration process again by selecting to restore the exact same back up data. This time, however, let the syncing finish.

Yes, in iTunes, the layout of the home screens is going to look all strange, with some of the folders you created seemingly missing and most of your apps thrown across multiple screens.  Heck, it was showing me *14* home screens — 3 more than the allotted amount. 😛

In the end though, my iPod touch 4G (running iOS 4.3.5) was completely restored (well, I’ve yet to try the apps and such but the folders, apps, and home screens certainly LOOK correct).

Now I’m just worried that my next sync is going to cause iTunes to throw the bizarre 14 home screens onto my touch because it’s still showing me the craziness. ^^;