iTunes removes apps from custom folders when it syncs iPhone and iPad?

I have a lot of apps on my iPhone and iPad, I use the "folder" feature to drag and drop them into customized groups to keep them organized. Each time I sync with iTunes, it moves applications that are updated etc. out of these folders. Is there anyway to prevent this?
Note: iPad 1; updated to latest OS | iPhone 3GS updated OS
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Have you tried recreating the folders in iTunes instead of on the device?

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SaraLynnn1Author Commented:
Thanks! Not only is that the problem, but it's also a much faster way to do it!
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