Also see:
How Folders REALLY Work in Google Drive - http://youtu.be/Aml2YXtzuKU
Shared Folders (Part 2/2): Recommended Use - http://youtu.be/enpHPRa5Pto
This is an excerpt from my workshop: Google Drive Essentials. Part 1 (of 2) is a quick explanation of how mistakes are commonly made using "Can Edit" when sharing folders in Google Drive, resulting in lost documents.
I am a professional technology trainer and consultant at the Technology Training Centre at the University of Alberta.
http://www.ttc.ualberta.ca