The fragment below can be used in a sidebar navigation to establish a folder-like subweb navigation. This uses the jqTreeview widget of the Foswiki:Extensions/JQueryPlugin.
Use it by adding%INCLUDE{"System.FlexWebListTree"}%
to your sidebar navigation.
If you want to hide the web navigation from WikiGuests then uncomment the following: %STARTINCLUDE%<!-- flexweblist tree --> %JQREQUIRE{"treeview"}% <div class="jqTreeview closed unique"> %JQICON{"house"}% - <nop>%WIKITOOLNAME% %FLEXWEBLIST{ webs="%USERSWEB%,User,People,public,%SYSTEMWEB%" exclude="^(TestCases|Trash).*" adminwebs="Applications.*" map="%SYSTEMWEB%=System" header="<ul>" format="<li><a href='$url' title='$sitemapuseto'><span style='background:$color;width:1em;height:1em;border:1px solid #eee;float:left;margin-right:0.5em'></span><nop>$name</a>" separator="</li>" footer="</li></ul>" subheader="<ul class=\"natSubWebs\">" }% </div> %STOPINCLUDE%