"...within surname files, do you divide and organize information? Some of my files are so large, and I go looking for a birth cert or census record or some such and it takes a while. I was wondering if it would actually be worth organizing further, or is that just a little too over the top."
Kath,
I think the key is to do what works best for you.
I had files set up like that but it was too messy for me. Now I have binders set up and files just for original, official documents.
My binders are broken down by family as follows:
Beaumont Binder #1
Divider #1 (yellow) - The first couple & their records. (Generation 1: John Beaumont & Sarah Simmons)
Divider #2 - (orange) The first child, spouse, etc. (Generation 2: John George Beaumont & Lavinia Emma Crayford)
Within Section #2 (still orange) - Each child for whom I have documentation in birth order. (Generation 3: John George Beaumont Jr.)
Within Section #2 (green) - Any children of the Generation 2 folks (behind their own parents).
And so on.
This makes it easy for me to flip through the binders to find the children of so-and-so and see what I've got so far. By now I have so many names (for me, not compared to a lot of other people, LOL) that sometimes I have to look at my genealogy database to find out who so-and-so's parents were so I know which binder to grab. I have three 3-inch binders holding my Beaumont documents. But that includes all the binder dividers and person sheets and family group sheets!

I really like this system. It's the easiest way for me to store and retrieve paperwork and it's the most logical way I could devise to organize the information so my family members could follow it, too (I like to give binders of documents to family members).
I know this is about binders but it might apply to folders, too.
Regards,
Josephine