I hope this makes sense,
It will place the icons in the order that they are added to the folder. Say you have the icons for "Pandora", "Music", "GoogleMusic" and "Shazam" in a Music folder and you want them in this order: "Pandora" "GoogleMusic" "Shazam" then "Music".
In edit mode, press and grab "Pandora" from the folder, it will take you out of the folder, like you want to remove the app from the folder, just drop it back in the folder. Do the same for GoogleMusic, then Shazam then Music. That should put the apps in the order you want. It sucks if you have a lot of apps, but if you know this before you start filling the folder in the 1st place, you only have to do it once.