When accessed, the search is executed, and the results are aggregated and presented as a virtual folder.
Some virtual folders (like Desktop) have an accompanying special folder that is a reference to a directory on the physical file system.
Some third-party programs add their own virtual folders to Windows Explorer.
On her computer desktop, she set up virtual folders to sort through the e-mail messages.
In fact, files in a virtual folder do not even need to be stored as files on the hard drive.
When these files are accessed, the search is run with the saved query string and the results presented as a virtual folder.
That approach makes sense until you want to organize these photos into thematic groupings - virtual folders, in other words.
In iPhoto, you click a + button to create a virtual folder, then drag pictures into it.
I vaguely recall it features neat tricks like making albums and tags into virtual folders.
It also presented a search interface to perform manual searches, and save them as virtual folders.