What do you mean by "folder"? Do you mean a booklet that is folded and
saddle-stitched?
In Word 2002 and later, there is an option to print multiple pages in
booklet layout. Format you paper size to the page size, not the sheet size -
ie. if you want to print half-size pages on 8.5 X 11 paper, set you page size
to 5.5 x 8.5, portrait. Make sure your total page count is a multiple of 4 -
if less, insert blank pages in the appropriate places. In File > Page Setup >
Margins, set Multiple pages to Book fold.