Teri,
You cannot rename the user folders, as the name is still tied in to that specific user throughout the system. Create a new user account, with the name the way you want it to appear on the folders, the copy the old user profile to the new account.
Copy a User Profile:
Open System in Control Panel. On the User Profiles tab, and under Profiles stored on this computer, click the user profile you want to copy, and then click Copy To.
In the Copy To dialog box, under Copy profile to, type the location for the new profile, or click Browse to select the path.
Click Change to open the Choose User dialog box, click a new user from the Names list, and then click Add. The new user name will appear in Add Name. Click OK to add the user as a new user profile on your computer.
Note: You must be logged on as an administrator to the local computer to copy user profiles. To open a Control Panel item, click Start, point to Settings, click Control Panel, and then double-click the appropriate icon.
http://support.microsoft.com/default.aspx?scid=kb;en-us;811151
How to Copy User Data to a New User Profile
Note: You cannot copy to/from the account you are logged on to. In most cases, its more convenient to log on to the built in Administrator account.
