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Here is what you will need:
One dedicated permanent machine with decent specs, has two Ethernet ports, and however much storage you think you will need.
A switch to connect all target machines to your "server"'s network connection.
Latest Ubuntu Server ISO.
Internet connection.

Guide:
Step 1: Connect one port on your dedicated machine to the internet, and the other port to your local network for remote booting your target machines.

Step 2: Install Ubuntu Server OS on your permanent machine. Select the appropriate interface for the internet during installation and allow the OS to install onto the dedicated machine (which we shall now call the server). When you get to the Software Selection page of your Ubuntu Server installation, select all fields except the last “manual package selection.”

Step 3: Once installation is finished, restart the server and install the following packages:

ubuntu-desktop, tftpd-hpa, ltsp-server, nbd-server, nfs-kernel-server, isc-dhcp-server

Other helpful packages include bmon and ethtool.

Step 4:
Edit /etc/network/interfaces to set up your localnet interface with a manual address.
Edit /etc/default/isc-dhcp-server and add your localnet interface name inside the interfaces quote.
Edit /etc/dhcp/dhcpd.conf to have this line at the end: include “/etc/ltsp/dhcpd.conf”;
Edit /etc/ltsp/dhcpd.conf to reflect the parameters you want for your local network interface.

Step 5: Once your PXE configuration is good and tweaked, run: ltsp-build-client –fat-client --keep-packages –mount-package-cache /directory/you/create/for/packages --purge-chroot --prompt-rootpass

To edit your newly built LTSP boot image simply run ltsp-chroot and treat it as if you are in another server. Enter “exit” to leave the chroot. To apply the changes to your LTSP boot image, in your server type: ltsp-update-image

Step 6: Create a new user on your server for use as your LTSP client login. Your network booted LTSP images will use the server's local users for login credentials. The server home directory of the user will be mounted and shared between ALL booted LTSP clients. Any file modified on one LTSP client will immediately reflect the change on all other booted clients.

To configure your LTSP server for automatic login, use the paramenters here to create a lts.conf file. Place this file in /var/lib/tftpboot/ltsp/.

Step 7: Now to set up folding. Download and configure the terminal/text mode Linux client for your x86 or x64 architecture.

DO NOT allow more than one machine to use the same folding client in the same directory. The two machines will write over each others work and you will fold nothing. The best method is to create one directory containing your folding client, configure the folding client the way you want it, then make as many copies of that directory as you have clients to run (or slots you plan to keep filled). When swapping out hardware the new machine can continue work where the other left off by booting into the LTSP client and just executing the folding client in the appropriate directory that was used previously.
Try to only make as many client directories as you plan to keep permanently running, since leaving work units unfinished for days will result in their expiration and penalties tacked onto your folding key.


I will update this guide periodically as I add screenshots/code, find inaccuracies, or simply wish to clear things up.
Thanks for reading!
Ultra II
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2nd generation Intel Core i7-2820QM Stock HP Radeon(TM) HD 6850M Standard HP RAM 
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Samsung 470 sieres Blu-ray player & SuperMulti DVD burner Standard 1-fan laptop setup Windows 7 Home Professional x64 
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17.3" diagonal Full HD HP 3D Ultra BrightView I... Backlit Keyboard with numeric keypad 130W Adaptable Power Brick HP Envy 17 3D Standard Case 
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Synaptics Touchpad Beats Audio HP 3D Active Shutter Glasses, HP TrueVision HD ... 
CPUMotherboardGraphicsRAM
Intel® Core™2 Quad Processor Q9550  XFX MB-N780-ISH9 LGA 775 NVIDIA nForce 780i SLI... GIGABYTE GeForce 210 ADATA 2GB 240-Pin DDR2 SDRAM 
Hard DriveHard DriveOptical DriveCooling
Western Digital Caviar Black Seagate Barracuda LG Black LG Blu-ray/HD DVD-ROM & 16X DVD±R DVD ... Standard Fans 
OSPowerCase
Ubuntu Server 11.10 OCZ ModXStream Pro 600W Antec Nine Hundred 
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Ultra II
(13 items)
 
 
Servolator
(11 items)
 
CPUMotherboardGraphicsRAM
2nd generation Intel Core i7-2820QM Stock HP Radeon(TM) HD 6850M Standard HP RAM 
Hard DriveOptical DriveCoolingOS
Samsung 470 sieres Blu-ray player & SuperMulti DVD burner Standard 1-fan laptop setup Windows 7 Home Professional x64 
MonitorKeyboardPowerCase
17.3" diagonal Full HD HP 3D Ultra BrightView I... Backlit Keyboard with numeric keypad 130W Adaptable Power Brick HP Envy 17 3D Standard Case 
MouseAudioOther
Synaptics Touchpad Beats Audio HP 3D Active Shutter Glasses, HP TrueVision HD ... 
CPUMotherboardGraphicsRAM
Intel® Core™2 Quad Processor Q9550  XFX MB-N780-ISH9 LGA 775 NVIDIA nForce 780i SLI... GIGABYTE GeForce 210 ADATA 2GB 240-Pin DDR2 SDRAM 
Hard DriveHard DriveOptical DriveCooling
Western Digital Caviar Black Seagate Barracuda LG Black LG Blu-ray/HD DVD-ROM & 16X DVD±R DVD ... Standard Fans 
OSPowerCase
Ubuntu Server 11.10 OCZ ModXStream Pro 600W Antec Nine Hundred 
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