One of the biggest challenges to new (and many old) users of Google Drive is the effective organization of thousands of files. Check out this video discussion of the four best practices in organization: folder management, color coding, intelligent naming, and Shared with Me folder management.
Please note that since the recording of this video, Google has change their interface in a slight, but important way. In the “Shared with Me” folder, the folder location of a file will no longer appear in a side column. It will now appear as a file navigation tree at the bottom of the screen when the file is selected. See the image below.