Google Reader has added a "Discovery" section which recommends new feeds to you based on the RSS subscriptions of people who share similar interests with you. This list is automatically generated and takes into account your location, your existing feed subscriptions as well as your Web History (which I assume means your browsing history).
They've also added drag and drop editing of feed subscriptions which means you can move feeds between folders, or change the order of your feeds or folders. But the Google Operating System blog points out that you still can't rename folders or tags.
Google Reader Improves Feed Management [Google Operating System]