I made a purse with Crystal Palace Deco-ribbon (I'm a continental knitter too). Pictures here
. I was a bit frustrated not only by the folding, but also by the twist that developed. I had to stop periodically to let the ball untwist. And yes, my ribbon did fold up. I learned to embrace it since I was making a purse and not a scarf. I think maybe the only solution would be to use larger needles so the stitches are looser? I think this would be ok for a scarf.
What have you made with ribbon? How did you deal with twist? I have some more ribbons in my stash so I'd appreciate any tips you might have!