Although I stated that I feel people are wasting their time attempting to define folksong/folkmusic it doesn't mean that I don't find it extremely interesting looking at how others attempt to define folksong. Here are some books that you folksong defining people should enjoy. Let me know if you come any closer to defining folksong after you have finished these books. If anyone has some other books they would recommend please contribute them to the thread.
Posen, Sheldon I. For Singing And Dancing and All Sorts of Fun-The story of the Ottowa Valley's Most Famous Song: The Chapeau Boys. Deneau Publishers & Company 760 Bathhurst St. Toronto, Ontario M5S 2R6 (Shelly Posen is a folklorist and a hell of a good singer who performs with Ian Robb in Finest Kind. This book is a good examination of a single song within a tradition.)
Glassie, Henry & Edward Ives, John F. Szwed Folksongs And Their Makers Bowling Green UP 1970 (An examination of three 'folk' songwriters)
Ives, Edward D. (Sandy) Larry Gorman-The Man Who Made The Songs. Goose Lane Editions 469 king St. Fredericton, New Brunswick Canada E3B 1E5 (Great book on PEI born woodsman songwriter who spent a considerable time in the Maine woods writing songs. Sandy has two other great books which focus on individual songwriters.)
Cantwell, Robert When We Were Good The Folk Revival Harvard UP 1996
Rosenberg, Neil Transforming Tradition: Folk Music revivals Examined U of illinios Press (Focus's on both song and instrumental tradition with two really good articles on how Stan Rogers song Barrett's Privateer's and how it entered into the focus canon overnight-or so the author attempts to convince the reader).