With Mac OS X Panther came the Finder Sidebar - allowing quick access to drives, files folders etc. Even though this is useful, it can sometimes take up a lot of space, especially if you have a small screen.

Some people will choose to disable the sidebar completely by double-clicking on the divider turning off the toolbar completely (command-option-T) if they want to save space, but there is another option.

You can drag the divider bar until only the icon shows, there should be a point where the bar jumps into place. Now don't worry that you can't tell what the icons are, because putting your cursor over any of them brings up the name. If you still want a way to distinguish between them, try adding custom icons for each item.