Andrew Coates was kind enough to point out that there is another way to hide a folder that is much, much simpler. Thanks Andrew!
If you have one particular folder that you want to hide, for example, a task folder of Christmas presents for your family (not exactly tasks, but tasks are a convenient place to keep such lists), you can exclude that folder by customizing the view. Here are the steps:
It may seem appealing to do the reverse and list only the folders that you want to include, but each folder in the mail hierarchy would need to be included for flagged mail to appear in the To-Do Bar, so excluding is actually better.
Mischa may still want to go the "Categories" route since he has so many folders he wants to exclude. For those of you with only one or two folders that you want to exclude, this way is much simpler. Thanks Andrew!
I would also like to thank Brandon Bloom for his VBA script (commented below)