Are you in Inventor bychance? Is there also an Unfold option? If so, it is used to flatten a sheet metal part (if it was made a certain way) so that bends can be added (at least this is the way it works in Solidworks)...
Fold panels are the little "drop down" arrow in the middle of the panel. They allow you to hide UI elements which aren't used that often. For example, the Annotation panel has tools to place text and dimensions; if you "unfold" the panel you see the dropdown lists of styles and buttons for opening the style editors.
Actually "folding" describes what happens to a ribbon panel when the size of the AutoCAD window or the number of panels on the ribbon changes. They will "fold" or "unfold" horizontally to fill up the available space.
See p. 3 in Lynn Allen's AutoCAD 2011 Tips & Tricks (PDF link).