And "archive" to remove the email from the inbox. The filters are pretty good (although I haven't found a way to do AND/OR operators between fields, just within them) and in addition to assigning labels you can auto-archive, among a few other options. Doing the filtering on the server is much cleaner (and more sensible) compared to doing this in Thunderbird previously.
Combining filters and labels with the "Multiple Inboxes" labs feature is even better. I've got labels+filters for each of the customers of my consulting/contractor business and have the ones for whom I'm currently doing projects visible via the multiple inboxes, which gives me the latest info, within its context, all on one screen. Brilliant.
Admittedly, it takes some time getting used to. I hated the Gmail UI when I first started using it and would use Thunderbird instead whenever possible. These days the only negatives I can think of are:
* paranoid policy for attachments. No exes, no zips with exes for sending or receive. This can be REALLY annoying when working on desktop apps for customers. I would upgrade to the paid-for version if that let me switch this off.
* reliability. About once a week either IMAP or the web interface go down. Almost never both simultaneusly, though, and rarely for long, so it's tolerable.
I like the conversations, but what I really want is the ability to turn off conversation views, especially when searching.
Sometimes when I'm searching tech discussions with colleagues/clients, etc, I just want to see the emails with the relevant terms, not all 75 emails in the conversation in a big cumbersome list.
gmail just uses tags instead of folders. That way a single message can be in multiple folders at once. You can still do anything you could do if they were called 'folders' instead.