It's a bit difficult to describe such an ultra-lite RPG without reiterating the complete rule set. So this is a brief overview.
Folklore uses a dice-pool system with six-sided dice. It doesn't come with a setting and is a universal game.
For character creation you have points which you can allocate to 3 attributes: Body, Mind and Social. Furthermore, you also have freeform Traits and Inventory. So far, so good and nothing special.
What I like about the game is that you also need to define a Personal Quest and Relationships to other characters or NPCs.
Wealth is an abstract measure of what you can afford and how you are able to buy new things.
Character creation is easy and quickly done. While you don't have a wide range of options with choosing attributes you can customize your character via traits and the personal quest. For a rules-lite system, this works nicely.
Game play is also pretty simple. You choose your attribute and may add other options (for example an applicable trait). You roll the number of dice and discard 1 -3. Every number higher than 4 is counted as a success. The game gives you a success ladder so you can see how well you've done.
Furthermore, you can also gamble to increase your chances of success.
There are also rules for conflict which include a Wound and Effect system. Either you deal damage to the attribute of your opponent or you create an effect. These are conditions like blinded, dazed etc.
The battle field in combat is divided into zones, this is like in Fate.
Equipment gives bonus dice, for instance, an average sword will give you +1 die.
It's a two-pages PDF. The page size is a bit funny as it is supposed to be printed out as a pamphlet. It's nice to look at with a clear layout, good font choice etc.
The system is easy and open-ended. I like how it abstracts Wealth, Wounds and Effects and combat zones. Damage is directly done to your attributes instead of a separate Hit Point attribute.
The game takes aspects of "modern" games like Fate and boils them done to a concise rule set.
I would have like to see an example of how opponents are supposed to work. Furthermore, a magic/supernatural system is completely missing.
In comparison to other ultra-lite games like Risus, Pulp! (aff), Adventurers! (aff) it stands its ground.
In fact, I personally like it more than Risus which I always found odd because of the silliness and the death spiral. Folklore is straight-forward and very intuitive. Adventurers! is more comprehensive but the rules are slightly more restrictive and it is only geared towards fantasy. The selling point of Folklore is its open-endedness. With freeform traits, a system-neutral approach and a very simple rule-set you can do a lot.
If you like ultra-lite games I can recommend this game.
Check out the author's blog for example characters, a random equipment chart, how to make monsters and some insights about relationships.