SharePoint: Move SPListItem inside folder to root and set lookup field value

Question

Given a custom list with folders for countries:

ListA
---FolderA (Title: "USA")
------Item1
------Item2
------Item3
---FolderB (Title: "Switzerland")
------Item4
------Item5
------Item6

Given a new custom list with country names:

ListB
---Item1 (Title: "USA")
---Item2 (Title: "Switherland")

We have to move all Items in all folders to the root of the list. The Items contain a new Look-up field "Country" which looks up the ListB. When we move the items, it should set the lookupfield to the same as where the item was:

ListA
---Item1 (Lookupfield "Country" set to ID 1)
---Item2 (Lookupfield "Country" set to ID 1)
---Item3 (Lookupfield "Country" set to ID 1)
---Item4 (Lookupfield "Country" set to ID 2)
---Item5 (Lookupfield "Country" set to ID 2)
---Item6 (Lookupfield "Country" set to ID 2)

I don't need the finished code, just some generic hints.

What I have so far:

Get all items in the ListA, and check if it's not a folder:

if (item.Folder == null);

then get in which folder the item is:

item.Web.GetFolder(item.Url.Substring(0, item.Url.LastIndexOf('/')));
// I don't know if this works and I don't understand the solutions
// provided here http://social.msdn.microsoft.com/Forums/en-US/sharepointdevelopment/thread/c0ca9f6b-ec1a-4e8d-b053-7969573370a4/

Update a Lookupfield from an item:

item[lookupFieldName] = ID;

Answer 1

Some rough code:

SPFolder rootFolder = ListA.RootFolder;
SPFolder folder = item.Folder;
if (folder != null)
{
    string folderName = folder.Name;
    //The details of this I'll leave up to you
    int lookupItem = GetListItemIdFromListBWithMatchingName(folderName);
    item[lookupFieldName] = lookupItem;
    item.Update();

    //This is the part that moves the item; note you may need something more robust
    //than my simple replace of the folder name.
    SPFile itemFile = web.GetFile(item.Url);
    string updatedUrl = itemFile.Url.Replace(folder.Name + "/", string.empty);
    itemFile.MoveTo(updatedUrl);
}