I started out my system with a small picture album that I wrote about here. It worked great, but I ran out of room for all my coupons.
Next, I went to one of those small accordion type plastic folder systems. It worked okay, but I hated how I couldn't see the coupons.
Hence, why I finally broke down and decided to be one of those shoppers in the store with a binder at hand. So far, I'm loving it!
To organize, I purchased baseball card sleeves (found at Target). I used small pieces of paper and taped them onto the pages to use as dividers. Among my sections are "canned", "breakfast", "Boone", "baby", and I even have a section specifically for Target coupons.
Each section of the page holds one coupon (unless I have multiples of a coupon, then it holds them all). If I have to fold a coupon to fit, I just make sure to fold it to where I can see the specifics and the expiration date.
So what works for you with couponing?