If you ever come across the error “the folder name is not valid” when trying to open a known good site in SharePoint Designer 2010, the answer/fix may be simpler than you think. At least it was for me
You may need to check Central Admin and make sure SharePoint Designer access is activated. But, if all that is already done (or you probably wouldn’t have been able to do it previously), all I had to do was go to the SharePoint server and, at the command prompt, do an IISRESET. Voila – – I was then able to open sites in SharePoint Designer.
All Things DotNet Discussed – Winforms/ASP.Net/SharePoint/WPF