Your root folder is the folder at the top of your web site folder structure (the root of an inverted tree).
For example, http://www.mysite.com/ would be the root folder. A file stored in the root folder would look like www.myste.com/index.htm. If you had a folder named images in which you would store your pictures and you wanted to point to one named sunset.jpg, it would be one level below the root and it would be addressed as www.mysite.com/images/sunset.jpg. Notice it has one "/" to indicate root folder and a second "/" to address the image folder's content.
It's similar to the way a hard disk is structured. C:\ is the root folder. C:\AUTOEXEC.BAT resides in the root folder. C:\My Documents is a subfolder of the root folder. If a document named Introduction.doc was stored there it would be addressed as C:\My Documents\Introduction.doc.