diff --git a/pandora/archive/tasks.py b/pandora/archive/tasks.py
index 3624c7acd..5645e7cc4 100644
--- a/pandora/archive/tasks.py
+++ b/pandora/archive/tasks.py
@@ -10,6 +10,51 @@ from django.conf import settings
 
 import models
 
+_INSTANCE_KEYS = ('mtime', 'name', 'folder')
+
+
+def get_or_create_item(volume, f):
+    in_same_folder = models.Instance.objects.filter(folder=f['folder'], volume=volume)
+    if in_same_folder.count() > 0:
+        i = in_same_folder[0].file.item
+    else:
+        if settings.USE_FOLDER:
+            item_info = parse_path(f['folder'])
+        else:
+            item_info = parse_path(f['path'])
+        i = get_item(item_info)
+    return i
+
+def get_or_create_file(volume, f):
+    try:
+        file = models.File.objects.get(oshash=f['oshash'])
+    except models.File.DoesNotExist:
+        file = models.File()
+        file.oshash = f['oshash']
+        file.name = f['name']
+        file.item = get_or_create_item(volume, f)
+        file.save()
+    return file
+
+def update_or_create_instance(i, volume, f):
+    instance = models.Instance.objects.filter(file__oshash=f['oshash'], volume=f['volume'])
+    if instance.count()>0:
+        instance = instance[0]
+        updated = False
+        for key in _INSTANCE_KEYS:
+            if f[key] != getattr(instance, key):
+                setattr(instance, key, f[key])
+                updated=True
+        if updated:
+            instance.save()
+    else:
+        instance = models.Instance()
+        instance.volume = volume
+        instance.file = get_or_create_file(volume, f) 
+        for key in _INSTANCE_KEYS:
+            setattr(instance, key, f[key])
+        instance.save()
+    return instance
 
 @task(ignore_resulsts=True, queue='default')
 def update_files(user, volume, files):
@@ -17,61 +62,14 @@ def update_files(user, volume, files):
     volume, created = models.Volume.objects.get_or_create(user=user, name=volume)
     all_files = []
     for f in files:
-        path = f['path']
-        folder = path.split('/')
+        folder = f['path'].split('/')
         name = folder.pop()
         if folder and folder[-1] in ('Extras', 'Versions', 'DVDs'):
             name = '/'.join([folder.pop(), name])
-        folder = '/'.join(folder)
-        #print folder
-        #print name
-        f['folder'] = folder
+        f['folder'] = '/'.join(folder)
         f['name'] = name
-        oshash = f['oshash']
-        all_files.append(oshash)
-
-        same_folder = models.Instance.objects.filter(folder=folder, volume=volume)
-        if same_folder.count() > 0:
-            i = same_folder[0].file.item
-        else:
-            i = None
-
-        path = os.path.join(folder, name)
-
-        instance = models.Instance.objects.filter(file__oshash=oshash, volume=volume)
-        if instance.count()>0:
-            instance = instance[0]
-            updated = False
-            for key in ('mtime', 'name', 'folder'):
-                if f[key] != getattr(instance, key):
-                    setattr(instance, key, f[key])
-                    updated=True
-            if updated:
-                instance.save()
-        else:
-            #look if oshash is known
-            file_objects = models.File.objects.filter(oshash=oshash)
-            if file_objects.count() > 0:
-                file_object = file_objects[0]
-            #new oshash, add to database
-            else:
-                if not i:
-                    if settings.USE_IMDB:
-                        item_info = parse_path(folder)
-                    else:
-                        item_info = parse_path(path)
-                    i = get_item(item_info)
-                file_object = models.File()
-                file_object.oshash = oshash
-                file_object.name = name
-                file_object.item = i
-                file_object.save()
-            instance = models.Instance()
-            instance.volume = volume
-            instance.file = file_object
-            for key in ('mtime', 'name', 'folder'):
-                setattr(instance, key, f[key])
-            instance.save()
+        all_files.append(f['oshash'])
+        update_or_create_instance(volume, f)
 
     #remove deleted files
     #FIXME: can this have any bad consequences? i.e. on the selction of used item files.
diff --git a/pandora/settings.py b/pandora/settings.py
index fffce4eaf..55150a99f 100644
--- a/pandora/settings.py
+++ b/pandora/settings.py
@@ -193,6 +193,8 @@ DEFAULT_LISTS = [
 ]
 #0xdb.org
 USE_IMDB = True
+#this should idealy go away, one folder per item
+USE_FOLDER = True
 
 #POSTER_SERVICES=['http://data.0xdb.org/poster/']