There are now 3 categories in the sidebar: Personal, Devices and Network, each getting an expander - Rhythmbox style.
The state of the expanders are saved so if you collapsed a category and close nautilus, next time you'll open it, the category would be collapsed.
The Nautilus Elementary PPA has been updated and it now includes the revamped sidebar. You can install it (Ubuntu 10.04 Lucid Lynx only) using the following command:
sudo add-apt-repository ppa:am-monkeyd/nautilus-elementary-ppa
sudo apt-get update && sudo apt-get upgrade