I've never felt the need for labels. I have thousands of emails, and I can still find the exact email I want within seconds with the excellent search feature. This combined with the conversation view makes labels/folders/whatever you want to call them completely redundant in my view.
I'm baffled by these people who still feel the need to spend a significant fraction of their day "sorting" their emails. I have one big inbox full of everything, but it's still all at my fingertips. Life's too short to be printing virtual dymo labels and sticking them to every minor correspondence I get.