The home page on any website the place where most visitors arrive, and is therefore the most important page. Additionally, by having as many long tail keyword rich pages as possible, many different searches can be targeted. Long tail keyword pages should be used to attract page ranking, which can then be passed to the most important pages on the site. For this purpose a tiered structure of pages is recommended to maximise the way ranking is channelled.
A tiered page structure puts the most important page or pages, those pages to which all page ranking is focussed as the first or top tier. Several second tier category pages linked to and from the top tier, with several third tier pages for each second tier page. The third tier is where your long tail keyword pages are situated. For the main part, third tier pages should only link to their associated second tier category page, and in turn the second tier pages link to the top first tier. The link structure is what channels the page ranking up from the third tier to the top tier via the second tier. Don't just stop at three tiers. If your content dictates more and more specialised categories, then by all means add a fourth and fifth tier etc.
In some ways the way page ranking is generated on a tiered website is like a river with many tributaries. The numerous sources of the main river are the third tier long tail keyword rich pages. Several third tier pages channel their flow into the second tier category pages, therefore creating a wider stronger channel of page rank flow. The second tier category pages then channels their flow in to the main channel which becomes the actual river of page rank flow to the top tier home page.
In many cases webmasters choose to put each of the second tier categories, including all of their third tier long tail keyword pages inside separate directories. For example the URL could be www.my-site.com/category-name/long-tail-keyword-page-name.html. However this is not strictly necessary on many websites, especially sites with few pages. It is the way links are structured rather than how directories are structured that determines how tiers work. In fact, Google's webmaster guidelines recommend a simple directory structure, as it can take some time for every page to be indexed if the directory structure is very complicated. It is entirely possible to have every page on the site inside the root folder, and still achieve the tiered effect and control how page ranking is directed to the top tier pages.
This website, www.littledetails.co.uk is based to a large extent on the model of individual categories inside particular directories. As with many aspects of SEO, there is no hard an fast rule, and this site does deviate from the ideal for practical reasons without harming the flow of page ranking to the home page. However this site does adhere to the guideline of simple directory structure with every page on this site no more than one directory down from the root.