The URL '/_folder/subfolder' is invalid. It may refer to a nonexistent file or folder, or refer to a valid file or folder that is not in the current Web.

This error will occur when activating a feature containing a module if you prefix the "Url" attribute value of the "Module" element with a slash:

<?xml version="1.0" encoding="utf-8"?>
<Elements xmlns="http://schemas.microsoft.com/sharepoint/">
  <Module Url="/_cts/FOLDER" Name="Modules">
    <File Path="ModulesTemplate.dotx" Url="Template.dotx" />
  </Module>
</Elements>

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