Folder name is the name of the section that is going to appear in the url of your page.
For example: corybuckner.com/bryony/index.php?/ongoing/open-zones/
has a section name called On-going and a folder name called ongoing.
For example changing the folder name to lola (!) and also by publishing Off and On the exhibit, you're gonna have
corybuckner.com/bryony/index.php?/lola/open-zones/
but the section name is still going to appear as On-Going in your menu.
Hope this helps.
* you need to publish your exhibits off and on, because it holds to the original url address if you don't. That's for other reasons... search the forum about this last bit of info, as it hasn't got to do with the question of this thread. I try to keep answers direct so others can benefit from simple answers to specific problems.