I found the video most helpful.
The Counterparty wallet provides a Bitcoin address. You enter username_FLDC_1BitcoinAddress into the f@h client. The text file of all folders is downloaded by the FoldingCoin team and parsed to find FLDC or ALL or SCOT plus the Bitcoin address.
I still don't understand how folders are paid in FLDC as they provide a Bitcoin address not a FLDC address.
In my case, I created a wallet with
https://counterwallet.coindaddy.io/#, which gave me a Bitcoin address. Was I supposed to do something else?
they are paid in FLDC by using a Bitcoin wallet, because the Counterparty layer is on top of the Bitcoin blockchain
so all Counterparty assets are distributed to bitcoin addresses
don't forget to use stanford's pass key in your client config
https://folding.stanford.edu/home/faq/faq-passkey/after 10 Work Units you will start getting bonuses of stanford's folding points for every completed Work Unit