Yes, your computer knows what your doing. Your computer does keep certain logs of your activity.
File Management
No.
Downloading is copying a file from the Web to your computer.
Yes, when you copy a folder, not only are you copying the folder, but you are also copying all the contents inside.
Transferring files
you need a password
no, downloading and copying is different.
Windows Vista provides two tools for exploring the files and folders on your computer- WINDOWS EXPLORER and the COMPUTER WINDOW. Both display the contents of your computer, using icons to represent drives, folders, and files.
hierarchical structure of Directories
Yes.
a computer virus
Having multiple folders open at one time could probably slow down your computer, but that would depend on how much RAM you have. Nowadays you would probably need hundreds of folders open to make a dent in the average computer. So it's very insignificant