Fun times with IE8 installation. Apparently it fails to register a singular DLL file, and will cause Windows Explorer to open up new windows every time you try to explore to a folder/directory.

This is the fix:

Open a new “Command Prompt” window by right-clicking and selecting “Run as administrator”

At the prompt, run the command “regsvr32 actxprxy.dll”.

If you get an error from RegSvr32 with an error code of 0×80070005, you forgot to run the Command Prompt as administrator

Thanks to Random Poster on Egghead Cafe