Is protein folding thermodynamically favourable? If yes.. why?
What determines whether a process is spontaneous or not, is the change in free energy, not the increase of entropy. Entropy is one important factor, as is enthalpy. Entropy in this case is not increasing since the system is becoming more organized, however,enthalpy is greatly favoured since protein folding creates many Hydrogen bonds between its polar aminoacid fragments and surrounding water and also many hydrophobic interactions between their non-polar aminoacids constituents. Take a look at this page to have a better understanding about protein folding thermodynamics (introductory text, though it´s a good starting point).
http://www.chembio.uoguelph.ca/educmat/phy456/456lec02.htm