Many exciting discoveries have recently revealed the versatility of RNA and its importance in a variety of functions within the cell. Since the structural features of RNA are of major importance to their biological function, there is much interest in predicting RNA structure, either in free form or in interaction with various ligands, including proteins, metabolites and other molecules. In recent years, an increasing number of researchers have developed novel RNA algorithms for predicting RNA secondary and tertiary structures. In this review, we describe current experimental and computational advances and discuss recent ideas that are transforming the traditional view of RNA folding. To evaluate the performance of the most recent RNA 3D folding algorithms, we provide a comparative study in order to test the performance of available 3D structure prediction algorithms for an RNA data set of 43 structures of various lengths and motifs. We find that the algorithms vary widely in terms of prediction quality across different RNA lengths and topologies; most predictions have very large root mean square deviations from the experimental structure. We conclude by outlining some suggestions for future RNA folding research.