Virtual folders are folders that exist only in the Eclipse workspace tree, and have no file system location.
By using virtual folders, file and folders can be organized in a project hierarchy independently of the file system location of those resources.
Regular file and folder resources can not be created under a virtual folder, since they need a file system location as their parent in order to exist in the file system. Only other virtual folders, or linked resources can be created directly under a virtual folder.
Creating virtual folders
New Folder Wizard