That's one of my pet peeves: when people misuse words.
A lot of composers use the folk-song traditions of their native countries to inspire their compositions, whether they take a popular folk melody or compose in the style of a type of song that is popular at the time: Mozart wrote a set of variations on "Ah! Vous dirai-je Maman" (more popularly known as "Twinkle Twinkle Little Star" in America, or the ABC song); Dvorak, when trying to discover "American" music, wrote several newspaper articles pointing to Native American and African American melodies as the sources that American composers should be using for truly original music; Smetana, Haydn, and Bartok lifted melodies from folk songs and incorporated them into their compositions; Holst and Vaughan williams wrote entire suites based on different folk tunes; Bach wrote cantatas based on Lutheran chorale melodies, many of which were previously taken from popular melodies by Martin Luther himself; and Aaron Copland set African American spirituals for solo voice and piano.
My point in listing all of these past examples of classical composers employing folk music in their compositions is to say that folk music was the popular music of the day. The "folk" melodies were the kinds of things that your everyday citizen might sing to himself as he went about his life.
The popular music of today exists in a very different fashion: most popular melodies today have an original artist attached to them. In a lot of cases, the artist might have a copyright on the song. So, should a composer decide to write a piece of music, and incorporate a melody by an artist with a copyright on the music, would the composer have to pay that artist royalties whenever he sold a copy of the sheet music for that piece?
I know John Rutter wrote the "Beatles concerto" for piano and orchestra, that consists of a medley of beatles songs. I also know that the 5 Browns included a song on their latest album that was a medley of three Disney songs. I just wonder if they have to pay royalties for those... I know these are drastic examples, but they're the only examples of currently popular music being employed in a classical context that I can think of.