Here is how:
How to import photos into MM4 and keep the windows folder structure:
STEP 1. On the HOME tab in the GET MEDIA section, choose SEARCH COMPUTER.
STEP 2. A media file search box pops up. The default is that the search location is set to c:\. NOTE: if you know that all of your windows photo folders are in a more specific location, use the BROWSE button to navigate to that location. For instance: c:\users\familyname\my pictures. I chose a more specific location to alleviate the search from running through all of the application folders etc…
If you use the Browse feature, you will navigate to the more specific photo location and choose SELECT FOLDER.
STEP 3. Your new location now appears in the path location of the media file search box. Put a check box in “exclude system folders” and click START SEARCH. A Get media items from search results box pops up. It will show your navigated folder (in my sample “my pictures”) and list all the sub-folders underneath. Make sure you click on the “my pictures” folder and that one of the sub-folders is not the only item selected.
VERY IMPORTANT: Make sure the box “Show items in subfolders” has a checkmark in it!
You should see EVERY photo in the “my pictures” folder as well as all the photos in the subfolders shown in the right half of the window. At this point you will want to click GET ALL MEDIA ITEMS.
STEP 4. This is where the magic happens. Another box will pop up that says: The current import list contains items from multiple Windows folders. Do you want to maintain this folder structure in the memory vault. Click YES!