Tachyon, which ver. of XP are you using ? Does it have latest SP? Or atleast SP2 or not ? If not please install the SP.
This problem occurs because Windows stores each folder's view settings and customizations in the registry. By default, this data is limited to 200 local folders and 200 network folders, for a total of 400 folders. The data for folder view settings and customizations is stored in the following registry keys:
HKEY_CURRENT_USER\Software\Microsoft\Windows\Shell\Bags
HKEY_CURRENT_USER\Software\Microsoft\Windows\ShellNoRoam\Bags
Even if its not there, create it .
To work around this problem, create a BagMRU Size DWORD value in both of the following registry keys, and then set the value data for both values to the number of folders that you want Windows to remember the settings for. For example, for Windows to remember the settings for 5000 local folders and 5000 network folders, set both values to 5000.
You must create the new value for the following registry keys:
HKEY_CURRENT_USER\Software\Microsoft\Windows\Shell
HKEY_CURRENT_USER\Software\Microsoft\Windows\ShellNoRoam
Follow these steps, and then quit Registry Editor: 1. Click Start, click Run, type regedit, and then click OK.
2. Locate and then click the following key in the registry:
HKEY_CURRENT_USER\Software\Microsoft\Windows\Shell
3. On the Edit menu, point to New, and then click DWORD Value.
4. Type BagMRU Size, and then press ENTER.
5. On the Edit menu, click Modify.
6. Type 5000, and then click OK.
Follow these steps: 1. Locate and then click the following key in the registry:
HKEY_CURRENT_USER\Software\Microsoft\Windows\ShellNoRoam
2. On the Edit menu, point to New, and then click DWORD Value.
3. Type BagMRU Size, and then press ENTER.
4. On the Edit menu, click Modify.
5. Type 5000, and then click OK.
Check this KB article for details. http://support.microsoft.com/kb/813711