I have the textbook definition of the hydrophobic effect in front of me but I don't understand it. How can it be entropy driven, how can all of the hydrophobic molecules lumped together be a higher entropy state. I just don't have "feel" for this, appreciate any help.

There is a nice explanation, pertaining to chromatography, in Janson, Ryden, Protein Purification, VCH, 1989, pp. 45, 200, 209. In short: When a hydrophobic molecule (protein) attaches to the stationary phase some ordered water molecules on the surface of the protein must leave into the less ordered bulk H2O. This amounts to an increase in entropy. Since the enthalpy change is small this leads to a favorable (for hydroph. int. with stat phase) negative change in free energy. Of course, the attachment of the protein to the stat. phase, like your lumping together of hydrophbic molecules, represents an increase of order thus a decrease in entropy. The entropy effect of H2O is larger than this and also larger than enthalpy effects.
Apparently this knowledge is cleaned from vanīt Hoff plots.

There is a good Scientific American article available at http://bioinfo.mbb.yale.edu/sciam/sa-water.pdf

Check out the modeling of isobutene vs. urea, in water. The structure of water is often drawn as a "v", but it is actually tetrahedral with two clouds of negative potential counterbalanced by the hydrogen atoms with positive potential.

In ice water adopts a tetrahedral geometry each with 4 hydrogen bonds. However, in water the structure is more open and each water forms 3-6 hydrogen bonds. At the surface of a hydrophobic molecule water cannot hydrogen bond with the molecule so in order to maintain its tetrahedral geometry it forms a highly ordered clathrate (cage) of water molecules.

When two hydrophobic molecules in water come together the highly ordered water between each is released back to the bulk water and results in a net increase in entropy.

Well, this is the story that Chemists tell each other, although there is no consensus on a molecular scale physical theory of the hydrophobic effect. See http://exobiology.nasa.gov/biomod/andrew990830/hydrophobic/hydrophobic.html

So don't worry, you are not the only one that doesn't have a feel for this :-)

Whatever the explanation, it has to account for an apparent empirical fact: Entropy is dominating the thermodynamics of this.
The salting out effect increases with the saltīs properties to increase surface tension of water. This also lends credibility to the formulation that the water on the surface of the protein behaves like a water interface, which is ordered more than the bulk.