1) I've compiled my code and everythings cool. I want to run my custom version on my rockbox. Do I just need to copy the rockbox.ipod file to my .rockbox directory to run my new version or is there something more i need to do?
you can't just copy that file as everything else needs to match. Run "make zip" after building, and then extract that zip to the player like you do with a current build.
2) Is there an overview of what each folder and file are for anywhere on the wiki?
I don't think there's a general overview, but some parts are documented. Just search the wiki, look after the "For Developers" section in the DocumentationIndex.
3) What do most people use for a code compiler? I have a multitude, Borland, Codewarrior, Microsoft, Eclipse. which is the best for rockbox?
For building Rockbox for your device you
need a cross compiler, and it needs to be gcc. See the wiki on which version to use (and make sure to use the recommended version). For building the simulator you'll most likely need a gcc too -- it might compile with other compilers. Most devs work using linux, and on that platform gcc is
the compiler.
Eclipse is not a compiler but a development environment. You can configure Eclipse to use gcc btw ...