There may be good reasons to allow only folders to have children in some applications, but any application that does so is definitely NOT an outliner. I personally prefer being able to make notes with sub notes. When you are limited to using folders to create hierarchy it inhibits the ability to move items around, to play with the organization.

As far as I can tell, the only difference between a folder and a document in Scrivener is the icon. I think it is really just a conceptual idea.

Steve Z.