[mhonard]

Pressing the menu button on the home screen does not show a new folder add option. What gives?

[corruptblitz]

It's working on mine. You have to have the tray open and have any icon selected. To select an icon without opening it, use the trackpad. The option is called "Add Folder". The other method would be to hold your finger down on any icon and pick Full Menu from the popup.