If I create a sub-folder with more than a one-word title using Assets, the name is joined with an underscore i.e. 'Technical_Manuals'. Is there any way around this as obviously this wont be suitable front-end?
You want folders, filenames, template groups, and even templates to follow the lowercase, no spaces, use of underscores or dashes format. Additional with files, you want extensions. All these things can be transformed for the front-end with Plugins or PHP. The use of spaces will introduce encoding in the url (
%20) etc., since they are consider unsafe.
You can use any basic Find and Replace plugin to strip dashes or underscore from text for the front end, see Low Replace or Find and Replace Plus by Laisvunas as two examples. You can then also use CSS or a plugin to transform from lowercase to Sentence case, Title Case or other options as well.