To edit or organize your bookmarks easily, just click the little open-book icon at the left of the Bookmarks Bar, near the top of the Safari window. It looks like this:

The bookmarks panel will appear on the left side of Safari, divided into two sections:

1. The top section is Collections. It contains:

• History: Sites you’ve visited recently (same as using the History menu, except Safari 4 adds visuals). You cannot edit these, but you can delete them.
• Bookmarks Bar: The Bookmarks Bar is the row of bookmarks between the toolbar and tabs, at the top of the Safari window. You can drag links into the bar at any time; just drag the link icon to the Bookmarks Bar.
  
  But to edit them, sort them, or add folders or sub-folders, you will need to open the bookmarks panel.
• Bookmarks Menu: These bookmarks appear in the application menu bar. Frankly, I never use these.
• Address Book: These are bookmarks gleaned from your Address Book entries. The Address Book is the ideal place to store websites of friends and family, as well as company websites if you have Address Book cards for them.
• Bonjour: I never use this, but I believe it will show local websites broadcasting via the Bonjour (zeroconf) protocol.
• All RSS Feeds: These are all the RSS feeds that you have in any of your Safari bookmarks.

2. The lower section is Bookmarks. These bookmarks are only accessible from the bookmarks panel. However, they also show up as suggestions when you manually start to type a website address. It’s a good place to keep bookmarks you don’t need often. They will be synced between computers if you use MobileMe bookmark syncing or another syncing service.