If you've never noticed the Folder List in Outlook 2003, you're not alone. It's the sixth view accessible from the navigation pane and the easiest way to see it is to hit CTRL+6.
And now you're in the Folder List you're probably wondering what you're doing there. Well it looks kind of similar to the normal Mail pane, but now you can also see a bunch of extra folders like Tasks, Contacts and Public Folders (if you use these). This is what Outlook would look like if you didn't have those handy Mail, Calendar, Contacts and Task shortcut views that you're probably more familiar with.
The Folder List is quite useful sometimes though. Check out the Sync Issues folder to see if you've had any problems synchronising items with your mail server. Unless you're trouble-shooting a problem you can probably delete any items in the Sync Issues folder as they are just taking up otherwise useful space in your store. On several occasions I've helped colleagues slash the size of their mailbox just by zapping unwanted Sync Issue reports!
This view is also a great way to see the totality of your 'Outlook Stuff' in one handy view. But there's one important thing you lose when you go to Folder List view: the Favorites Folder which is only available in the Mail pane. This alone makes the Folder List a whole lot less appealing for me.
If, however, you prefer to make daily use of this view, you may wish to change the Folder List button into a large button and then either move it above the mail button or even remove the mail button from the navigation pane. As always with Outlook there are so many ways to customise the layout that it's worth playing around to find the view that suits you best.
The Folder List is the only view that I use - I prefer to see everything in the one tree.
Must be why I didn't even know about the favourites folder :)