I'm trying to follow the instructions for upgrading moodle. issuing the mv moodle moodle.backup command simply renames my moodle folder to moodle.backup. Don't I still need to have a folder called moodle?
When you unzip or untar the new moodle distribution, that process will automatically create a new moodle folder.
but this folder is in the moodle.backup folder. Should it be somewhere else?
You probably unpacked the moodle package to the moodle.backup folder. You should unpack it to the parent folder (to the same folder that the moodle.backup folder is in). This folder could be something like "public_html" or "wwwroot".