This screencast shows you how to create a new Collection on Google Docs and share it with your students.
A "Collection" is sort of like a folder, but it works more along the paradigm of an iTunes playlist, meaning that any file you put into a Collection remains in your "Home" library but simply becomes visible within the Collection -- rather than being physically moved into the Collection.
After you've shared a Collection with your students, any file or sub-collection you or your students put into the Collection will be visible to all members of it. The screencast shows you how to put a file into the Collection and also how to remove it.