How do I approve & publish a folder so that everything inside of it is published and live?
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If you have SharePoint 2010 standard license you will get document sets. Document sets allow you to treat documents as one set. Similar to a folder. Whats nice about sets is you can than use a approval workflow to approve the complete set.
If you want to continue to use existing folders a workflow to approve all docs will be difficult. Perhaps others have ideas.
You can use the Manage Content and Structure function in SharePoint (from site settings on all publishing sites) to select everything in a folder (mark all items in heading row) and publish it.
You can manually run workflows against a folder, so you could create a custom workflow in Visual Studio and maybe even SPD with some help (...i.e. you'd probably need some 3rd party activities) to go iterate through the items in the folder the workflow was initiated against and approve/publish the files within it. Once deployed, you'd simply go to the ECB (context menu) for the folder and click Workflows or select the folder and click the Workflows button on the Ribbon.
Short of the Document Set idea put forth by Paul, I can't think of a no/low-code way to do this...and The document set approach is going to require a fair amount of work if you have a lot of existing content that would need to be moved from folders into document sets.