Don't limit yourself to the term "folk rock" as you'll miss a lot of important artists and influences. Open your research up to include "country rock" too, or you'll miss the entire California scene, which included a lot of influential artists on the American scene. British folk rock scene was either the sort of Celtic folk rock of acts already mentioned, and others like June Tabor, Planxty, Bothy Band, Silly Wizard, et al, or you could look at the British blues rock genre, which is a whole different kettle of fish, though Richard Thompson and Stevie Winwood sorta straddles the two.

If I were doing a paper, I would focus on something very narrow and specific, like "Summer of Love" or the history of one particular folk festival, like Cambridge in England, or Newport in the US. You could do a thing on Dylan, The Band & the Basement Tapes.

Off the top of my head, more folk/rock acts ideas for artists to look up: Nitty Gritty Dirt Band. Poco. New Riders of the Purple Sage. Lovin' Spoonful. The outlaw country boys (Waylon, Willie, et al). Emmylou Harris. Little Feat. Richie Havens. Bob Marley and the Wailers. Gram Parsons. Flying Burrito Brothers. The Eagles. Country Joe McDonald. Santana. Van Morrison.

For books, try:
"Barefoot in Babylon" (about Woodstock).
"Turn! Turn! Turn!: The '60s Folk-Rock Revolution"
Here is a cool article about The Band and it's folk connections and influences:

http://theband.hiof.no/articles/band_and_folk.html

More books:

"American Troubadours: Groundbreaking Singer-Songwriters of the 60s"
"Baby, Let Me Follow You Down: The Illustrated Story of the Cambridge Folk Years"
"Ashley Hutchings: The Guv'nor and the Rise of Folk Rock--Fairport Convention, Steeley Span and the Albion Band"
"The Electric muse : the story of folk into rock"
"Desperados: The Roots of Country Rock"
"The British Folk Scene: Musical Performance and Personal Identity (Popular Music in Britain)"
"Bringing it All Back Home" (also has a video series in the same name)
"Dazzling Stranger: Bert Jansch and the British Folk and Blues Revival"
"Rock: The Primary Text: Developing a Musicology of Rock (Ashgate Popular and Folk Music Series)" (this is most likely only available at music libraries, but is spanking new, published in 2002)

I haven't included much on specific artists, though a lot of the above covers some.

Good luck, have fun, and narrow that focus!