Have you considered using a notetaking or stickies app instead? could use separate 'notes' for each group, and most offer a hierarchical tree view of your notes...
hmm.. if i use one of those and I click on the hierarchical tree, I am thinking that the tree might become unviewable at the same time (viewing only the text group or sticky..)
folding is probably something of a hack, ie the editors use a tag (like HTML) to indicate text 'grouping'. It's a useful feature, but I've yet to see it in anything other than a plain text editor.
Unfortunately the insertion of images (or anything other than text for that matter) is something that text editors do no do - for that you need (at least) a rich text editor (like wordpad).
hmm..yes, I seen that wordpad does past insertion of images (and does do other things), but yet is without the last features I described.. text folding seems to be something that wordpad most lacks.. (perhaps it is outside of .rtf standards)
hmm. so a simple editor like wordpad lacks text folding,..
"anything other than a plain text editor", lack text folding,..
and text editors lack image past insertion,..
If someone could extend .rtf unofficially (maybe with a tag)(maybe [foldline start] [foldline end]) (with wordpad or something other), with simple text folding, it would appear to be a useful small app for small, medium (even large) documents, for both students and professionals,..
I would have though that this would be surly already available,..but if not, it would make a (very) good addition, to what is available now..