Folders OR Pages...

I would like to know what wy is better for SEO.
Having the the folders witht the name of the page, meanning:
http://mydomain.com/contact/
Which is http://mydomain.com/contact/(defult.htm)
Or
http://mydomain.com/contact.html

I also would like to know if I should link all the pages one to each other that I have in a certain folder that ANY WAY
only registered users can have access to. I also blocked this folder from the tobots.txt.

Thanks!

I like to keep all pages as close to the root as possible.

'www.mydomain.com/business-opportunities.html'
is a good example. Use the file name and throw a few keywords in there too. Doesnt help a lot, but then again every little bit helps.

Ive used folders too, and didnt see much of a difference, i just hate having to go through multiple folders to find pages.

Can you explain your second question, im not sure what you want to do. youve already setup the protected folder and asking if you should link all pages inside it together,?? or you want to know how to protect that folder??

So I understand that it's ok having each page in a folder...

My other question was:
I know that I suppose to link all the pages of the website to each other. Most of the time we can see at the footer. What I would like to know if I should do the same to my "members" area. It's a protected area that you can have access to it only with a username and password. Should I do it there as well?
I also blocked this folder from the tobots.txt.

Thanks!

why not!
Linking is one of the only ways, people will be able to get to some pages. Specially if theyre not popular pages or members pages not listed in a search engine, you definately should work out some type of link structure that allows people to "get" to your page. I wouldnt go so far as to link each page together. I like to use the following sort of link structure whether it be a normal site that search engines can see, or a members only area.

There is no need to link from every page to every page, as long as you have some type of structure and a way that people can find their way back to the home page.

Home
> Category 1
> > Sub Category1
> > > Topic Related Page1
> > > Topic Related Page2
> > > Topic Related Page3
> > Sub Category2
> > > Topic Related Page1
> > > Topic Related Page2
> > Sub Category3
> > > Topic Related Page1
> > > Topic Related Page2
> > > Topic Related Page3
> > Sub Category4
> > > Topic Related Page1
> > > Topic Related Page2
> > > Topic Related Page3
> Category 2
> > Sub Category1
> > > Topic Related Page1
> > > Topic Related Page2
> > > Topic Related Page3
> > Sub Category2
> > > Topic Related Page1
> > > Topic Related Page2
> > > Topic Related Page3
> > Sub Category3
> > > Topic Related Page1
> > > Topic Related Page2
> > > Topic Related Page3
> > Sub Category4
> > > Topic Related Page1
> > > Topic Related Page2
> > > Topic Related Page3

I would mix. See which one works for you. I have tried this in the past, both work for me.

Thanks guys!