I can no longer create a folder on my home screen with 4.04. What am I missing?
Did you try dragging and dropping one shortcut on top of another? That is how it works on the Galaxy Nexus.
Drag the first icon you want in the group onto the home screen. Then drag all the rest on top of that one, it will create a folder for you.
Greg nailed it:Drag one of the shortcuts you want in a folder to the home screen you want it on, now go back to the app drawer and find the second, drag it on top of the first icon, instant folder. Open the folder and tap at the bottom of it to name it what you like.
Sure does work. Thanks a lot I would never had figured it out.