1 Correct answer
OK, I've had a little time this morning to take a look at this for you and here is what I have… It is working just fine for me but you will be required to make 1 or 2 little typo changes yourself…
In line 7… You need to change the folders path string…
var traceFolder = new Folder ('~/Desktop/Live Trace/');
In line 71… You may want to change the save options to 13 for CS3 compatibility…
compatibility = Compatibility.ILLUSTRATOR13;
...#target illustrator while (app.documents.length) { app.activeDocumen
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Well this is where I got so far.
I changed the script that you wrote to import to single Ai file and it's working! 
now I need to add the sub directories division
#target illustrator
while (app.documents.length) {
app.activeDocument.close(SaveOptions.PROMPTTOSAVECHANGES);
}
var traceFolder = new Folder ('~/Desktop/Live Trace/');
var fileList = traceFolder.getFiles(/\.png$/i);
if (fileList.length > 0) {
var ai = new Folder(traceFolder.fsName+'/AI Files');
if (!ai.exists) ai.create();
main(fileList);
} else {
alert('This Folder contained NO Photoshop PNG files!');
}
function main(fileObjs) {
with (app) {
var orginalUIL = userInteractionLevel;
userInteractionLevel = UserInteractionLevel.DONTDISPLAYALERTS;
var fileName = fileList[0].name.slice(0, -4);
var docRef = documents.add(DocumentColorSpace.RGB, 576, 720);
for (var i = 0; i < fileObjs.length; i++) {
if (fileList instanceof File) {
with (docRef) {
var thisPlace = placedItems.add();
thisPlace.file = fileObjs;
var thisImage = placedItems[0].trace();
redraw();
thisImage.tracing.tracingOptions.loadFromPreset('Wave');
thisImage.tracing.expandTracing();
redraw();
}
}
}
with (docRef) {
var aiOptions = saveAsAiFile();
aiFilePath = new File(ai.fsName + '/' + fileName + '.ai');
saveAs(aiFilePath, aiOptions);
close(SaveOptions.DONOTSAVECHANGES);
}
}
}
function saveAsAiFile() {
var aiOptions = new IllustratorSaveOptions();
with (aiOptions) {
compatibility = Compatibility.ILLUSTRATOR12;
compressed = true;
embedICCProfile = true;
embedLinkedFiles = true;
flattenOutput = OutputFlattening.PRESERVEAPPEARANCE;
fontSubsetThreshold = 0;
overprint = PDFOverprint.PRESERVEPDFOVERPRINT;
pdfCompatible = true
}
return aiOptions;
}
Im not saying it can't be done… Just that Im going to have to go back and swap some stuff about… What I was thinking was 360 layers in the document and all artboards sharing these ( layers are document wide not artboard ) to have a layer for every placed file Im now going to need 1000's never seen a file with this before ( eeeek ) I do hope no one has to scroll these…
If some one will need to scroll these it will be me 
I know when you copy layers from one file to another you can check the "Paste remembers layers" option in the layers menu. after that you if you can select the layers and, again from the layers menu, you select the "Colect in new layer".
I don't know if it helps in scripting...
Those functions offered by the flyouts are NOT available to script… I have to do that… You can't set paste remember layers by script either… It help scriping no AI offers much less to work with that some of the other apps… Theres more to scripting ID's prefs than the whole of AI… 
Thank You!!!
Well it works perfect!
is there a reason for the redraw(), it seems to work faster without it.
I'm working now with a very simple trace and with 1024 * 1024 pngs so it's not that slow. I'll try to figure out the saves like you say, it will probably make faster.
Thank you again!
Yep you are correct redraw() will force the GUI to refresh the window… This will slow the script down so you are free to comment/remove those. I use them so I can see where the test script is at… If the main part is OK correct number of layers and artboards then the rest is just cosmetic tinkering have fun… Don't forget to add the beep() do get back and let me know how many files you have this chew over…
Well it was running all night (9 hours) and it seems like the saving doesn't help it to go faster.
It completed 15 folders while the first folder was done in 3 min. so I decided to stop the script.
The file is to heavy to work with and reopening it took too much time.
So I did a little mix and match between all the scripts so it will save each folder to a separate file in the main folder and close it.
It works like magic! after about an hour it Was all finished.
Here is the final script I used:
#target Illustrator
while (app.documents.length) {
app.activeDocument.close(SaveOptions.PROMPTTOSAVECHANGES);
}
Main();
function Main() {
var fileList, i, inFolder, subFiles;
inFolder = Folder.selectDialog( 'Please choose your Parent Folder…?' );
if ( inFolder != null ) {
fileList = Array();
inFiles = inFolder.getFiles();
if ( inFiles.length > 0 ) {
for ( i = 0; i < inFiles.length; i++ ) {
if ( inFiles instanceof Folder ) {
subFiles = Folder( inFiles.fsName ).getFiles( /\.png$/i )
fileList.push( subFiles );
};
};
placeAndTrace( fileList , inFolder );
};
};
};
function placeAndTrace( allFiles , inFolder) {
var doc, i, j, lay, thisPlace, thisImage, uIL;
uIL = userInteractionLevel;
var orginalUIL = app.userInteractionLevel
app.userInteractionLevel = UserInteractionLevel.DONTDISPLAYALERTS;
for ( i = 0; i < allFiles.length; i++ ) {
doc = app.documents.add(DocumentColorSpace.RGB,1024,1024);
for ( j = 0; j < allFiles.length; j++ ) {
lay = doc.layers.add();
lay.name = decodeURI( allFiles
.name );
thisPlace = doc.placedItems.add();
thisPlace.file = allFiles
;
thisImage = thisPlace.trace();
thisImage.tracing.tracingOptions.loadFromPreset( 'Wave' );
thisImage.tracing.expandTracing();
};
with (doc) {
layers.getByName( 'Layer 1' ).remove();
var aiOptions = saveAsAiFile();
var fileName = allFiles[1].name.slice(0, -10);
aiFilePath = new File(inFolder.fsName+'/' +fileName+'.ai');
saveAs(aiFilePath, aiOptions);
redraw();
close(SaveOptions.DONOTSAVECHANGES);
}
beep() //
};
userInteractionLevel = orginalUIL;
};
function saveAsAiFile() {
var aiOptions = new IllustratorSaveOptions();
with (aiOptions) {
compatibility = Compatibility.ILLUSTRATOR12;
compressed = true;
embedICCProfile = true;
embedLinkedFiles = true;
flattenOutput = OutputFlattening.PRESERVEAPPEARANCE;
fontSubsetThreshold = 0;
overprint = PDFOverprint.PRESERVEPDFOVERPRINT;
pdfCompatible = true
}
return aiOptions;
}
Glad you got it sorted… I did state earlier on that I thought you were pushing things… I would have NOT been happy if you'd sent me the result… It's Illustrator
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