I'm not sure what instructions you've followed, and I'm not a Mac person, but normally you right click(Mac equivalent) on a Bookmarks Toolbar space and click on new folder.

Is that what you've been doing?

Which instructions did not work for you?
There are several ways of creating a folder and moving your bookmarks to it. One of them is:

1. Go to Bookmarks > Show All Bookmarks menu.
2. In the left pane, under All Bookmarks, select Bookmarks Toolbar.
3. Right click on Bookmarks Toolbar and select New Folder.... (Note that if you have a 1-button mouse, you can right click by pressing the Ctrl button while clicking the mouse)
4. Specify a name for the new folder and click OK.
5. Drag your toolbar bookmarks to the newly created folder.

Another, quite similar, way is explained in this article: Use bookmark folders to organize your bookmarks.

Mate, I'm such a tool. I tried everything....except what you've suggested. Thanks a lot for your help. Paul.

Paul, it would be great if you could click the Solved It button next to the answer that solved your problem. The button appears only when you are logged in. This way, your question gets marked as Solved for the benefit of other users who may also have the same problem. Thanks !