I'm a reasonably competent sight singer, and I can tell you that the skills needed for sight singing 'classical' music (in the broad sense) and for 'folk' music (likewise) are not equivalent. Folk is generally much less demanding on the reader, both rhythmically and melodically.
Well, at least the way it is usually written out, with the ornamentations and syncopations ironed out of it. If you try to sight read some of the tunes in, say, "A Bonnie Bunch Of Roses," which purport to notate the interpretation in strict mathematical precision, you will find it quite demanding (and, I think, silly at that).
The basics of reading both, though, are identical. You have to understand the mechanics of the notation first of all, and a bit about scales and intervals. Then you have to internalize the sound of the intervals so you can make the jumps unerringly without an instrument to give you the cues. Reading the rhythms is not as hard to learn.
The biggest thing you have going for you in the folk genre is that the music is generally less chromatic and sticks with the more standardized, consonant intervals -- which are both easier to hear and more familiar to most people anyhow.
The bottom line is, you can use pretty much any book with melody lines written out to learn this. But getting advanced sight singing books (like Dvorak exercises and that type of thing) is way, way more than you need.
-Glenn