When you set up public folders, you should understand what types of folders you can create, where the hierarchy and content for the public folders are stored, and how Microsoft Exchange Server locates public folders when a user accesses them. Review these concepts before you set up your public folders. This will help you create a more efficient public folder system.
When you create a top-level folder, it resides on the public folder server where you created it (for example, on your hierarchy server).
When you create a subfolder, it inherits the replication configuration and replica list of its parent folder. This can be changed later by an administrator so that the parent folder and its subfolders are replicated to different servers.
The advantage of inheriting replication information is that the contents of the subfolders are available in the same locations with the same permissions as the parent folders.
If a top-level folder is not replicated, all of its subfolders are stored on the same public folder server as the top-level folder. If the top-level folder is replicated, its subfolders are stored on all public folder servers that contain a replica.