I use normal Shimano SPD's, the mountain bike type that you can clip into either side. Works well on my DaHon Curve SL. They don't fold, but are small enough that it's never been an issue.

As Thor says, the Crank Bros. EggBeaters would also be an excellent choice. I use them on my fixed gear bike; haven't tried them on my folder, but I'm sure they'd work as well as the Shimano pedals I'm using now.

Rick / OCRR