I must be missing something because I can't do anything in webbotlib project designer except add devices. I can't add delays or tell the microcontroller how long to run the motor/servo. Is this all that can be done with the designer or is there more?
Yes. Its not a programming language. However: it does make sure that you connect devices that can support the underlying requirement - ie things like making sure that if you are using hardware PWM then the IO pin is one that can support it - amongst MANY other checks. It also show you, for most sensors/controllers, how to wire up the device and how to set any DIP switches.
The generated code performs all of the initialisation for the devices you have added and also generates some example code of how to control/read the devices as a starting point for you.
Also, when I try to generate code it tells me I must specify the folder that webbotlib is installed in, even when I think I am putting the correct folder. Please help, thank you.
You must be selecting the wrong folder. It verifies your choice by making sure the file 'version.h', a component of WebbotLib, is in the folder the specified folder. NB It is the folder where you unpacked the WebbotLib download - not the folder where you are creating the code generation output from Project Designer.