Did you see the upgrade instructions in the readme file? You shouldn't have an NGUI folder to begin with.
Not sure what you mean I don't need an NGUI folder. The instructions inside the package (ReadMe - 3.0.9 f7.txt) say:
"1. In Unity, File -> New Scene
2. Delete the NGUI folder from the Project View.
3. Import NGUI from the updated Unity Package."
This creates a brand new NGUI folder at the root of the Assets.
What am I not understanding here?