one level deep.
Monocline groupings tend to be intuitive for those for whom computers are a means and not an end; conventional hierachies, so beloved of the Technological Priesthood, serve only to mystify. Sorting objects into piles vs. sorting objects into folders within fol...huh? Alan Cooper, among others, has much to say on their application as user interfaces.
Such an approach allows for a less black-and-white organisation by position, placing everything within view and reach -- in one (eg. roll of film) , two (eg. each folder in the MacOS Finder), or three (eg. many VR environments) dimensions.
Organisation into hierachies requires arbitrary, and often difficult, categorisation (though some systems attempt a relevant arranging on the fly) and navigation through an unexpanded hierachy can be confusing, unproductive and slow. Just think of the Web (okay, that's cheating; it's not a strict hierachy by any means).
The approach is most amenable to fusion with a conventional hierachy, as in the latter two examples above and as is occurring in conjuction with other visual paradigms in projects such as the Nautilus file manager and the Spider web browser.