Live folders

You have to have the update for 8.1, which right now means you have to enroll in the Preview for Developers program (it's free), then install the Preview for Developers app on your phone, and then enable it. Once you enable it, you'll get the update, and live folders will start working.

If you already have the update and have specific problems, please tell us what you're seeing when you try to set one up.
 
When you say update you mean the cyan?
from my lumia920

Lumia Cyan is a firmware that comes with Windows Phone 8.1.

The Update she/he/it speaks of is Windows Phone 8.1 Update (AKA 8.1.1, Update 1, GDR1...)
You will have to use the Preview for Developers program to access it early. You can wait though, and it will eventually come out for your phone though, but it will be a while, and if it is locked to a carrier, the carrier may not even push it.
 

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