File:

    A collection of data or information that has a name, called the filename.  Filenames are usually in the format filename.ext, where 'ext' is the filename 'extension'.  The extension is used to designate the file "type".

    Almost all information stored in a computer must be in form of a file; and, there are many different types of files: data files, text files , program files, directory files, and many more.  

    Different types of files store different types of information.  For example, program files store programs, whereas text files store text.

Folder:
(Directory)

    In graphical user interfaces, such as Windows and the Macintosh environment, a folder is a special file type that can contain multiple files.

   Folders are used to organize information into logical groups.  In the DOS and UNIX worlds, folders are called directories.  In the "Windows world" they're called folders...