Lookie here for links to previous discussions. I like the definition Malcolm posted. Every time this discussion comes up, people who have studied folk music pretty much agree with that. People who have bought into the record companies' definition argue against the limits. (Why bother having categories if they don't mean anything?) They seem to think that saying songs written by the Beatles, James Taylor or Joni Mitchell are not folk is some sort of insult. Not true.
Folk is (see above definition in Malcolm's post.
Folk singing/oral tradition is singing anything you like. (see above, para. 2 and 3.)