Hi Kees,
Your argument type should still be a string, you want it to hold a string which in your case will be a valid folder on disk.
You should then add to your argument the following: a) a custom editor from which you will use thebuilt-in FolderBrowserDialog which will do all of the work of showing the UI and letting the user browse folders and b) a type converter which will consider a value valid only when it's a string and it's a folder on disk. Of course if you want to allow the user to point to non-existent folders you may want to relax this check a bit.
If you haven't used stuff like TypeConverters, UITypeEditor, etc before you may want to catchup on these with the online MSDN docs.
HTH,
-Victor.