Answer:
Using definition from the dictionary.com web page a folk tale is a tale or legend originating and traditional among a people or folk, esp. one forming part of the oral tradition of the common people, and a fairy tale is a story, usually for children, about elves, hobgoblins, dragons, fairies, or other magical creatures.
The difference between the two seems to be that while fairy tales are specifically told for the benefit of children , a folk tale is told for the benefit of all those who hear and serve to keep a peoples culture alive, although there are overlaps between the two. What we traditionally consider fairy tales would be Cinderella, Snow White, Blue Beard, Hansel and Gretel, and examples of what we traditionally think of as folk tales are The Bremen Town Musicians, The Brahman Girl That Married a Tiger, and The Story of Chicken-Licken.