The central hub for your user's data files is called a workspace. You can think of the platform workbench as a tool that allows the user to navigate and manipulate the workspace. The resources plug-in provides APIs for creating, navigating, and manipulating resources in a workspace. The workbench uses these APIs to provide this functionality to the user. Your plug-in can also use these APIs.
From the standpoint of a resource-based plug-in, there is exactly one workspace, and it is always open for business as long as the plug-in is running. The workspace gets opened automatically when the resources plug-in is activated, and closed when the platform is shut down. If your plug-in requires the resources plug-in, then the resources plug-in will be started before your plug-in, and the workspace will be available to you.
The workspace contains a collection of resources. From the user's perspective, there are three different types of resources: projects, folders, and files. A project is a collection of any number of files and folders. It is a container for organizing other resources that relate to a specific area. Files and folders are just like files and directories in the file system. A folder contains other folders or files. A file contains an arbitrary sequence of bytes. Its content is not interpreted by the platform.
A workspace's resources are organized into a tree structure, with projects at the top, and folders and files underneath. A special resource, the workspace root resource, serves as the root of the resource tree. The workspace root is created internally when a workspace is created and exists as long as the workspace exists.
A workspace can have any number of projects.
The tree below (represented in the workbench navigator view) illustrates a typical hierarchy of resources in a workspace. The (implied) root of the tree is the workspace root. The projects are immediate children of the workspace root. Each node (other than the root) is one of the 3 kinds of resource, and each has a name that is different from its siblings.
Resource names are arbitrary strings (almost -- they must be legal file names). The platform itself does not dictate resource names, nor does it specify any names with special significance. (One exception is that you cannot name a project ".metadata" since this name is used internally.)
Projects contain files and folders, but not other projects. Projects and folders are like directories in a file system. When you delete a project, you will be asked whether you want to delete all of the files and folders that it contains. Deleting a folder from a project will delete the folder and all of its children. Deleting a file is analogous to deleting a file in the file system.