Hi Jim
you have probably solved or given up on this one, but I had a similar problem and eventually worked it out.
You do indeed set up an initial folder, with one or more of the pages that you would like the wiki to be pre-populated with in that folder. The files must be text format but they should have no file extension. You then upload them to wherever you need, create the wiki activity, select the specific file you want to start with. All pages created with the links in square brackets work because they point to files with identical names (e.g. [foo] will successfully create and link to a file called foo, but not one called foo.txt.
So obvious once I thought about it but at least it is here for anyone else searching on this problem.
Cheers
Ed