Those pretty colors aren't just for show. SpaceMonger assigns colors to files and folders based on their depth, which is how many folders they are contained within. Red things are at the top, or "root;" orange things are always within red folders; yellow things are within orange folders; and so on. For example:

Thus, you can immediately tell how deeply buried any file or folder is by its color.

(By the way, if you don't like the color scheme, you can easily change it by clicking on "Setup" and "Schemes".)

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