You'll have to open each subfolder use ctrl+a to select all,
And right click hold and drag the files into the listing on the folders tree to where you want the files in,
Windows will give you four options when you drop, move to/ copy to/ create shortcut to/ and cancel.
You can also use ctrl+v for the menubar to appear,
Select all of the files in the subfolder ctrl+a,
Go to the edit listing in the menubar,
And use the (move to folder) and navigate to where you want the files to be.
http://www.windows7hacker.com/index.php/2009/07/how-to-merge-folders-in-windows-7/