What causes proteins to fold? This is a complex question, but there are some rules of thumb that have been learned especially for how proteins behave in vitro (eg in a test tube). With our Folding@home simulations, we are working to understand how proteins fold in the cell (but that's for another post -- although see the post about Del Lucent's work for example).
Hydrophobicity is something that may be familiar to everyone in another context -- oil and water repel each other. Oil is a hydrophobic substance and many protein side chains are oily (hydrophobic), whereas others are more water like (or polar aka hydrophilic). Protein folding is very much driven by the desire for the oily amino acids to be buried within the protein fold, to get away from the water.
This is a pretty simple view and doesn't answer directly, *why* certain amino acids want to go away from water, but I'll leave that for another post.
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