Forum Moderators: open
I have pages that are in subdirectories thus:
www.domainname.com.au/first/second/index.html
and they seem to be indexed and turn up in SERPs OK.
If you have any doubts, just check the news feeds and more technical company sites and see how deep some of their directories are!
As long as it's unique and useful content, you follow the normal meta optimisation "rules", and your design is solid without bells, whistles and geegaws that'll trip the bots up, you should have no problem. (IMHO) ;-)
Hooroo
JP
<addendum> I do try and stick to the old 8 character/bit naming convention though. Consider it a challenge and it doesn't seem to effect my getting top 10-20 positions most of the time. <grin> </addendum>