Why Labels instead of Folders?
A labels mimic the concept of folders without being subject to the inherent limitations of folders. An email can be removed from the inbox and placed in a label just as Outlook did with folders. Both folders and labels are used to categorize mail to be used sometime in the future.
Other people use filters in conjunction with labels to have certain emails bypass the inbox. This is especially useful for recurring emails that do not need regular attention. The biggest difference between a label and a folder is the lack of a folder icon.
A folder limits you to a single categorization. People compensated for that in Outlook by nesting folders within other folders. A label simplifies the categorization schema by allowing for multiple labels to be attached to a single email item. Thus, one can label a conversation as "Budget", "Need attention" and "From the boss." When you want to see all emails that "Need attention," they are there and listed, but also viewable by clicking on the other labels.
There are many reasons to flag an email message without actually removing it from the inbox. With a Outlook folder, you either viewed the contents of a folder or the contents of the inbox at any given time. A label allows you to choose where an email message can be seen. This can be helpful in a group setting where you are using labels to indicate who is working on a particular email. It is also useful in a personal setting. For example, email sent to a student account can be flagged as "Student," yet you may also want it to be part of your normal day-to-day workflow. This way it can still reside in you inbox but is available for organization when you click on the "School" label.
There is more to searching an email than just using a keyword. Often metadata (data about the data) is needed. Labels act as metadata. This can be useful to limit the scope of a search by allowing you to search for a specific keyword, but only searching within those emails that have a particular label. A label as metadata also allows you to create context about what an email is about. Contextual searching enables more accurate search results.
You can drag and drop email messages from the inbox to a Label. To configure which Labels appear on the left-side of your Gmail screen, choose Settings > Labels at upper-right and ensure the Labels you want to appear listed are set to "Show" rather than "Hide."
At the top of the email screen there is a button with a pull-down arrow called "Move To." This button is used to move an email to a label in folder fashion. It will remove the email from your inbox and assign it to a label for future reference. This is a one-click method, just like drag-and-drop. From this same menu, you can also create a new label categorization.
If you're using labels as metadata you can quickly create more labels than can easily display on the screen. A search-filter box has been added to both the "Move To" and "Labels" buttons. This allows you to filter your labels quickly and efficiently.
When searching, you can filter your search to only a particular label by typing label: This can also be done via the "Show search options" link to the right of the Search box. The search option allows you to select the label from the Search pull-down menu.
You can also search for multiple labels. Type in the search box label: AND label:
This allows for full virtual nesting of labels. In this method, emails can be found in any number of search combinations. If this is a common search, you can save it as a Quick Link.
When using labels in the inbox it is helpful to add color to visually separate labels. For example, in our Help Desk email account, staff will add their personal label to an email they are working on. One label name may appear in dark blue, while another label is in red. This offers a quick visual identifier to help interpret information. This can be enabled in the Labs section and then selected by using the down-arrow next to each label.
Some people do not want to deal with their labels all that often. The label list can easily be hidden from view by pressing the minus sign next to a label box.
Once a label has been assigned, it can easily be removed. When you open up an email, the labels currently applied to that email are listed across the top, next to the subject line. Each label has an X next to it. Press that X to remove the label.