Using the latest version of PHP apis from Google (0.60), the code sample from google developer page seems to work except that the 'webViewLink' field is empty/null when using 'print_r($createdFile)' at the end of the function.
The drive.google.com site for my Google Apps domain shows the new folder successfully created with public permissions.
Any ideas?
As a workaround, if you have folder ID, you can use https://googledrive.com/host/FOLDER_ID_HERE