You can expand individual folders in the file display just like you can in the folder tree. This lets you see the contents of sub-folders and copy files in and out of them without having to actually navigate to the folder in question.
You can enable or disable expandable folders from the File Displays / Folder Expansion Preferences page.
When expandable folders are enabled, a small area on the left of the filename is reserved for an arrow glyph. To expand a folder, either:
To collapse a folder, click the glyph again, or press Alt+↑.
When a folder is expanded, you can drag files into its sub-folders to copy or move them. You can also drag files out of sub-folders into the current (parent folder), or drop them on other folders to move them around.
On the Folder Expansion Preferences page there's an option to enable "spring-loaded" folders, which expand when you drag over them and then collapse again when the drag operation is finished.
If you only want to use expandable folders sometimes, you can turn on the Hide expand buttons until a folder is expanded option. Expandable folders will still be enabled, but the expansion glyphs will be hidden until at least one sub-folder is expanded. To expand sub-folders without the glpyhs being visible, you can use the Alt+↓ key, or configure your own key to run the Go EXPANDBRANCH internal command.
When you copy files from within sub-folders (via drag-and-drop, copy-and-paste or using the Copy Files command), you can choose two ways of performing the copy: