Well my old beater was a steel frame 10 speed with MTB 1" tires that I had for 20 years, and it was kept outside and it was pretty rusty superficially, but the frame never really got weak. Wasn't the lightest bike but definitely was solid. I guess my question had less to do with rust and more to do with characteristics of the folding frame... that once you create hinges and therefor increased stress points, that perhaps steel was preferably... but I think the range of opinions will pretty much lead to what folders people own. I think both steel and aluminum are strong enough to handle the folding designs, although some may be less efficient or creak more.