Labels are an excellent way to organize your email in Gmail, because they’re far more flexible than folders. A single message can appear in as many or as few labels as you want.
To go to a different label or to create a new label, press the Menu key when you’re in your inbox or any other label. Then tap “Go to labels” 
.
You see a scrollable listing of all your labels. Gmail automatically creates these labels for you:
Inbox contains all your incoming messages.
Starred shows all the messages you’ve starred (Managing Incoming Mail in Gmail).
Chats contains the contents of all chats done via Google Talk.
Outbox shows mail you’ve created and asked Gmail to send, but that has not yet been sent.
All Mail contains all mail and chats, except for Spam and Trash. It also includes mail that you’ve archived (Understanding Gmail’s Organization).
Spam contains all mail marked as spam, either by you or by Google.
Trash contains mail you’ve deleted but that hasn’t been removed from the trash yet because it’s not more than 30 days old.
Note
If you use Gmail’s Priority Inbox on the Web, you’ll also see a label here called Important that shows all the messages that Gmail has flagged as being important to you. For details about how Priority Inbox works, and to set it up on the Web, go to http://mail.google.com/mail/help/priority-inbox.html.
If you’ve created any labels other than these using Gmail on the Web, then you see them here as well. You can’t create new labels in Gmail on the Droid 2. To create a new label, visit Gmail on the Web using your Droid 2 browser or on a computer.