I run iTunes on the Mac MBP (Snow Leopard). I have a folder of apps called New Folder. I click on it to open it, rename it, then close it. It shows the new name. But then after sync it changes back to New Folder.
I do wonder if it is some name conflict. The new name was sushi, and there are sushi apps. But what is weird is it does show up with the new name until I press sync.
EDIT 2/20/11: It isn't a name conflict; I have seen this at other times. Also it shows all the apps in alphabetical order, it appears.
Best Answer
You should just edit the folder name on the iPhone itself. Just tap and hold the folder until it wiggles then tap it again to open it, and tap the name to edit it. Unfortunately iTunes often has lots of unknown trouble syncing with iOS devices, much to my own dismay.