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From my experience it all depends on the size of the site. If you have less than 200 pages on your site I'd recomment that you try and stick to no more than domain.com/folder/page whenever possible.

But, one other thing I would strongly recommend is to never create extra or redundant folders unless they really add a lot of value to your site usability. And, never, ever, create empty folders ... it seems like a no-brainer but it happens a lot more frequently then you might think with people using them to force a specific heirarchy on their site or for the sake of stuffing keywords into their URLs or just because they think the final URL looks 'nicer' that way.

Last thought on why flat is normally better, homepages are likely to accumulate more links than any other page on your site and often more links than the rest of the site combined. So the closer an interior page is to the homepage the more benefit it will derive from the inbound links pointing to the homepage.

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