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Nobody has anwsered the initial question about the benefits of doing all this extra work.
I personally wouldn't even consider doing it after the fact. I doubt I would do it for the search engines even before the fact. The only thing that would lead me to do that is the natural organization and the ease of web site design management.
Now if you are going to do it the may be keyword benefit from using hypenated -- rather than underscore -- folder names. But I doubt that it is worth all the work entailed.
Spend the time getting 20 new links. I think you will be a lot further ahead.
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