In deadtree format newspapers, the "fold" is a horizontal line halfway down the front page of a section. Something above the fold is more readily noticed than anything else in the paper; this goes double for something in the main section, as the top half of the front page is all that a newspaper vending machine displays and is the only chance to sell the product. "If it bleeds, it leads."
The concept of "above the fold" has also been adopted in the field of human interface design. For example, it's easier to navigate through a web page if you don't have to scroll to get to the links. (This is why E2 places the searchbox and Epicenter nodelet on top.) Bad web design caused confusion when people were first migrating from AOL to the Web, as AOL's primary interface was unscrollable modeless dialog boxes, while the Web took the unfamiliar step of including forms and other active elements in a scrolling page.
Many E2 newbies go into whine mode when they discover that their first few writeups were downvoted because E2 has standards that it doesn't mention anywhere above the fold of the password mail sent to new users.