Windows XP Folders

I heard that instead of setting up the way a folder can be viewed through the folder properties you can just write a small file in notepad or similar and save it inside the directory. I’d like to do this for the folders containing my music collection. Anyone know what I’m talking about? What’s the format and extension for these files?

could you add a little more detail as in what does this file allow you to do?

Like when you right click on a folder and go to properties; you can select what picture to use for thumbnail view and in the folder itself you can arrange the files by name, size, etc. and if it contains audio files you can arrange them by track number, artist, album etc. Alledgedly you can create a file that does this in the same way you might write a playlist file in notepad.