Oh dear...this is VERY familiar to me now! Interestingly the folder is not populated by default.

I tried taking the above screenshot and Mac OS 8 chose to shove this error message in my face instead.

Windows now have the ability to "fold-up" into themselves (this is Apple's half-hearted concession towards "minimizing" a program I guess), and Finder windows can also be dragged to the bottom of the screen, at which point they turn into tabs, like real folders.

Lastly, here are some view settings for the Finder window, again demonstrating the customizability of this version of the Mac OS.

Shutting down Mac OS 8, which hasn't changed.