For me a great folksinger is someone who can use the dynamics of the tune to tell the story in the song they're singing. Let's face it, a thirty-eight verse ballad sung in a monotone is piss-boring! Stan Rogers, who I've only really encountered in that last month or so, is great at this! A few more...

James Keelaghan - "Captain Torres" had me in bits.
Cloudstreet - they do the voices of the different people in the song.
Eva Cassidy - had the ability to take sometimes banal and insipid songs and make them utterly compelling.
Vin Garbutt - well, for lots of reasons really but mainly that he's a giant of a singer!