How to create a folder on the iPhone
Touch and hold an app until it wiggles
Drag the app onto another application to create a folder
You can put up to 12 applications into any one iPhone folder

How to launch an application from a folder
Identify the folder that houses the app you want to open
Tap on the folder
Tap on the application you want to open within the folder
Alternatively, use the Spotlight search function to find the application and open it from there

How to rename a folder
Tap on a folder
Select the text bar at the top of the dock that will appear
Type a new name to rename the folder, then tap Done

How to remove items from a folder
Tap on a folder to open it
Tap and hold one of the items in the folder
Tap on the 'x' in the corner of the item
The item will be deleted from the folder