The Inmeta Build Explorer adds Folders to the Team Explorer Builds. This is a client based solution and works with the Visual Studio 2010 Team Explorer.
See what Brian Harry said about this tool.
See what Greg Duncan writes at Channel 9 Code4Fun
Fixes and changes
Version 1.1.8, Nov 15th 2011 : Series of fixes, documented here, in short: Queue default build now optional and configurable, loads tree automatically, reduces flashing, name matching case insensitive, login box removed and some minor fixes.
Version 1.0.1, May 12th 2011: Fixed issue with "build name equals folder" could not do any actions. Such a folder is now marked with the '$' sign.
Version 1.0.0, May 12th 2011: Fixes: Lost build when build name equals folder, credentials problem when accessing outside domain. Changes: Added context menu for: starting new builds directly, goto original build node andView All buiilds. Shows disabled builds.
Version 0.9.14, April 5th, 2011: Fixed problem with whitespace as separator, and separators in Team Project names.
Version 0.9.13, April 3rd 2011: Fixed problem with large build numbers (>100). Now works nicely with 1000 builds, highest number tested.
The source code are published at http://tfsbuildfolders.codeplex.com
Documentation and issues
Documentation is up on the codeplex site now, and issues can be registered there too.