Use regular directories or use mod_rewrite

I've been leaing about php for quite some time but when it comes to real writing I am not sure about some aspects of this. I want to create a script like this:

Home
-A
--a
--b
--c
-B
--a
-C
--a
--b
--c

I will have like 13 main directories and also some directories under that, like up to 5 or 8 per each of the main. Would regular / normal coder just create "physical" folders and lets say index.php files in all of them or should I go for something like "virtual directories" with mod_rewrite? I am not sure how this should be done.

Thanks.