I don't see how you can't do this. Actually, the way that people tend to think the subfolder stuff should work actually limits the number of rules you can apply to subfiles to a single rule. With the way it is now, you can have as many rules as you want apply to different types of subfiles.
Basically, you'd have:
If kind is folder, then run rules on folder contents
If kind is PDF, then color green
If kind is jpeg, then color red
Also, I don't know what you mean by another instance of the Download directory. Could you elaborate?