Dave Caolo of 52 Tiger (and TUAW) with a solution to getting iOS’ Newstand app into a folder:

Technically, Apple’s Newsstand is just a styled folder, and you can’t put a folder into a folder. Still, that behavior irks some users. Someone at The Coding Massacre has discovered a work-around that requires a quick hand.

It took me a few tries to get it, but it is possible. I even had to redo it after re-arranging some things and it worked again. I hate that Apple won’t let you uninstall the default included applications.