Can someone please tell me- Do you put water in a bottom container and food containers on top of that? I tried once and it didnt keep food even warm.

Yes - put boiling water in the bottom tray, then light the Sterno, so the fuel does not have to first heat the water - the created steam heats the food. I had excellent results using the Tiger Chef set in this way. You also need to keep the food containers in place to hold the steam in.

do the wire stands fold up for storage purposes?

No, they stack nicely, but do not fold up. The water pans arrived mashed in a flimsy box. I ended up getting some replacements since I felt it would be unsafe to try and straighten them out and use them. The company was very apologetic and gave me a refund and is looking into the packaging used on the shipment.

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