It has been shown that protein folding disorder is responsible for the disease such as transmissible spongiform encephalopathies something like the mad cow disease. Can someone explain how this mechanism causes damages to the brain?

The missfolded proteins have hydrophobic regions exposed, these mean it is energetically favourable for them to clump together, forming insoluble granules of protein which are believed to damage the cells.

This is just a possible answer - there is evidence for and against it!

there are two conformations of the protein...the normal (native) and the misfolded (P"scr")
it is believed, that misfolded the catalyzes the switch of the correctly folded into the misfolded...and that forms aggregates...compare that to alzheimer's disease and tau-protein)

like in alzheimer's aggregated protein seems to damage neurons

unfortunately, normal heat (as used for cooking) does not destroy the prions...you have to heat it to about 400°C to destroy it...

This is a very complicated subject, and the honest answer is that nobody really knows how, or even if, these amyloidogenic proteins are neurotoxic. Much of the current thinking is focused on the idea that the amyloid fibrils themselves are not the toxic species, but rather that it is oligomeric forms of the proteins, that is, species that are in between monomer and the final stable aggregate, that cause most of the problems.

But who really has any clue about this, anyway?

Actually we cant say that just the deposit of the proteins kills the cell, the neurons die because the sum of some factors; like, normal protein loose their normal function and acumulates inside vesicles and the citoplasm. Some scientists say that the Cellular Prion (PrPc) controls the Calcium flow trhu the membrane, but because some events that could be enviromental, genetical or inducible, the normal protein became mutated (Prion Scrapie ou just PrPsc), so this protein with a new conformation starts spreding its self thru the organism.

Some years ago, Prusiner came with this new theory about the "Protein X", he proposed that there should be a second element envolved, a protein, in the prion protein propagation, this is something very curious because they found active sites in the rogue protein, but still today we didnt find it any signal of this mysterious element.

Now, returning to the protein folding and agregation... When the first scientist looked at the brains of sheep afected whit scrapie they saw these dark and clumpered formation that they called Amyloid plaques, they thinked that those plaques where actually amiloid. Today we know that, because the new conformation assumed by the protein that has 43% beta sheet (Baldwin, 1993) the PrPsc acumulates inside the citoplasm... all this protein acumulated inside the cell starts to damage the molecular mechanisms and the cell die... But... not all the Prion-disease cases show the amyloid plaques, this means that there are other cellular and molecular structures being damaged by this event.