Lip fold dermatitis usually occurs in breeds with loose lips, like spaniels and St. Bernards. Pockets of skin that catch and hold saliva(like near where the dog's top canine pokes out) can become infected, creating a foul odor, discolored fur, moisture, swelling, and pain.
Jack recently got his first lip fold infection, after doing some "googling", we decided to try and treat it with apple cider vinegar since it wasn't too severe. If you use apple cider vinegar, it should be diluted. If your dog has a severe case of lip fold dermatitis(very painful, swollen, open-looking) than your dog needs to see a veterinarian. Other treatment options include oral antibiotics, mild skin cleansers, and diaper rash cream.
Apple cider vinegar cleared Jack's infection up after only two ACV washes within a day. His fur is still a little discolored, but that is likely to go away after a bath. It is not red, swollen, smelly, crusty, or moist like it was.
If your dog seems to be getting these infections repeatedly, surgery to remove the extra skin on the lips may be the best option.
Thanks to The Merck Veterinary Manual for some insight, and Gotta Love Cockers forum for the apple cider vinegar idea.