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This is not an SEO question per se, it is really a business question.  How do you need to organize your wallpapers to give you the information you need with your business. Depending on how you generate your revenue you may want to organize by type of phone, etc.  Tools like Google Analytics will sort things by folder and so if you build in a logical structure for your business model, you can then use the insights to help your business. Example, if you were paid depending on the type of theme, then you would need to organize around themes.  If you simply wanted to see what themes as a group were the most popular, then organize by themes.  Lots of things to consider.  How do your users think about browsing wallpapers?  Setup your directories so that it makes sense to them when they are browsing your site or looking at your URL in the SERPs. That said, I would organize by folder.  Helps when you need to analyze traffic to the site if things are in logical organized folders.  Also makes it easy to group. Good luck!

That link is really bothering me. I have never personally used that dirty piece of software, and I've contacted the guy who owns the website several times asking him to remove that link. It appears other links have been built without my knowledge but nothing OTT. So I don't think that's the issue. The drop on Jan 20th is just too much of a coincidence. I've lost over $20k. Fortunately Adsense ecpm is a lot higher, after decreasing bounce rate etc. Despite how it may appear, I've actually got quite a lot of experience fixing Google penalties. This is the first time I've ever been stumped and with it being my own site and getting desperate, I've made some choices against my better judgement. I've also hired a couple of other SEO's, which is actually how I ended up on a wild goose chase, trying to combat Panda, when I was certain it wasn't the issue. I did submit a reconsideration request and got the automated response that there was no manual penalties. I may take the loss and remove the ads for a week, at the end of the day, I need to get to the bottom of it. Thanks a lot for all your input Ryan.

Anybody else any thoughts on this?

I don't see any glaring SEO implications with this method, especially since page it's implemented on isn't indexed. The biggest issue I see would be the user experience. You might get a slow down in downloads from this, but if that sounds like it may not be a problem. Hope that helps!

The duplicates that were created by the CMS are now all gone. Though didn't get 100% sorted until several days before the recent Panda refresh. There was a line in the code, that said any index.html, display the contents of the homepage. So Google had 56+ pages showing my homepage. Crazy. It maybe that I've solved the issues, but waiting around for month is awful.

Jeremy, I could not agree more. It was among the worst decisions I've made in the seven years of working with websites. It was completely knee jerk and plain dumb. I think the drop was likely partly due to such a site wide change and then due to the duplicate pages that then resulted. Thanks for the input.

Much respect to Steve Jobs, but I definitely salivated when I saw it too, for a moment.  Quite possibly the most powerful link in the entire world - although it's presence will be short-lived, undoubtedly.

Sorry missed this, it's ok to close now. Thanks a lot.

Thank you!