A possible solution would be to put "shortcut" where your folders in the Dropbox folder. Dropbox could then abstract that "shortcut". So, say on my desktop I create a shortcut to my mp3/ folder, I would see a "Mp3" shortcut on my iphone also. So, that fix the "What if multiple folders have the same name" problem since it's not about folders anymore but about shortcuts that need to have different names.

So, it's a simple solution that would make power user happy but still leave the easy install, easy comprehensibility, etc.