My device is a Samsung Galaxy Ace / Cooper. It's running on Froyo. I want to auto arrange icons in the app menu. Is there a way to do this? Like auto arrange alphabetically? Is there a built-in function for doing this? Or an app on the market for the same purpose?
Some versions of the Touchwiz launcher already have the ability to sort alphabetically. Open the app drawer, press Menu, View type, and choose Alphabetical grid or Alphabetical list.
Since you're on a Samsung, I believe you have TouchWiz (I believe the Ace does, anyway). You can try the TouchWiz AppSorter app from the Market. It requires your phone to be rooted in order for it to work.
If you don't have root, one option is to wipe the data for the launcher application, which will force it to re-sort the apps. You do this by going into
Settings->Applications->Manage Applications and finding the launcher (should be called "TwLauncher", I think). Then you select that and hit clear data. Be warned, though, that this will wipe your home screen settings, meaning that any widgets or home screen icons you have set up will need to be reconfigured. You can easily set them back up, but it can be a bit annoying. You'd also have to do this every time you install a new app.
Another alternative would be to install a different launcher. Most third-party launcher applications seem sort alphabetically by default from what I've seen. ADW.Launcher and Launcher Pro are fairly popular choices.
Here is a related XDA thread with some discussion (aimed at the Galaxy S I9000, but essentially the same). Some of your options do depend on what version of TouchWiz you have.