Re: its not a folder, it is a directory!
I think the technical difference is that a "directory" is always a filesystem object. MKDIR, RMDIR, and so on attest to the low lying structures on disc being, correctly, known as directories.
"Folders", however, are a user interface concept. While they generally map on to directories, they can appear in a completely different place - "My Documents" is a high level folder belying the obscure place the stuff is actually kept. However folders don't necessarily need to be filesystem objects at all - "My Computer" and "My Network Places" to give two examples, they're both there in the left hand side of Explorer as if part of some imaginary filesystem, but they aren't real, just an easy metaphor.