In the virtual world, your inventory is like your closet in real life - except it holds everything you can imagine. It has your outfits for your avatars, other complete avatars, furniture, houses, plants, building components - if you can pick it up or copy it, it goes in your inventory. 

In OpenSim, you can travel to different grids. Part of doing that easily and successfully consists of managing your inventory. 

You have your root directory (your main inventory) and My Suitcase within your inventory root directory.

Things you wish to take to other grids should go in My Suitcase. Otherwise they may not make the jump, or you cannot have access to them if you wish to change them or even to remove them.

When you gridhop, you may take items from other grids. There are many freebie grids and regions; when you take / buy these items, they will go in My Suitcase, typically in the objects folder or in their own folder. 

You will start to lag quickly as you collect items. It is important to jump back to your home grid and move those items into your root before you hop again. 

When you move items from My Suitcase to your root directory, create different folders for them until you have a chance to sort them more specifically. You want to keep your Objects folder in your root directory manageable as well. 

When you jump home to empty the excess items in My Suitcase, open two inventory windows so you may easily drag items from one folder to another. Picking up large items - such as houses, ships, giant building components - will cause you to lag much faster and worse. You will have to jump home and move those items more frequently. 

It is important to sort your inventory on a regular basis. Your inventory can get out of hand rapidly. Just as with your computer hard drive, you can create additional folders and subfolders to help with organization. It helps your avatar function and perform optimally, as well as helping you find items when you need them. 

You may also use Filters to find items based on the type of item and if you have an idea of when you got it.