So...you basically just want to reorder your Favorites? What browser is this?
With IE, I'm not aware of any auto-arrange feature, so the only thing I can think of is clicking on your Favorites button and manually organizing the folders in the order you want by dragging them around. I can't think of any better way to do it.
If you're using a different browser, I imagine it's probably the same thing, unless any of them have better organizing tools. I tend to not stray too far from IE, so I'm really not sure.