"Folks" is more commonly used in American dialect speech, particularly the South. Walk into a Cracker Barrel south of the Mason-Dixon and the hostess will probably say, "How you folks doin tonight?" Bush uses it a lot, not because hes a politician but because hes from Texas. He once referred to the "folks" in Al Qaeda
But even in Standard American, the word pops up often enough that its not remarkable. A lot of people, perhaps more so in the older generations like mine, refer to our parents as "my folks." Or if two groups show up to use a park or picnic ground at the same time, the spokesman for one group will say, "Why dont you take your folks over there because its shady and youre going to want to use the barbecue pits anyway, and Ill take my folks over here because we need the open space to fly kites."
"Folk," the proper singular form, does not have such a bad cachet. It means exactly the same as Volk in German: a people. All German nouns are capitalized. The Amish are a thrifty folk. Californians are a tolerant folk. The British are a fast-talking folk while the Texans are a slow-talking folk.
I dont know when the strange plural form "folks" arose but by the turn of 19th century folk/folks was regarded as too colloquial and fell out of use in standard discourse. It was reintroduced half a century later in academia with its new meaning of "the common people," with "folklore" meaning the traditions of people who pass their traditions down orally. "Folk music," "folk art," etc. followed naturally. Im not sure when "folks" began creeping back into colloquial speech. My grandparents grew up in the 1880s and they taught it to my father. My mothers parents didnt speak English.
Oddly, its in German where the word volk has a bad cachet because of its overuse by Hitler and the National Socialist Party: "Ein Volk, ein Reich, ein Fьhrer" Theyve had to coin the awkward mouthful die Bevцlkerung to mean "the people."