After upgrading Internet Explorer to version 7, several users are no longer able to browse folders in the Explorer View of a Document Library.
After some testing, it seems that you can see the top level of a Document Library in the Explorer View, and you can open files that are located there, but if you try to open a folder by double clicking on it, you get the following error message:
Windows cannot find '(null)'. Make sure you typed the name correctly, and then try again. To search for a file, click the Start button, and then click Search.
Windows Explorer also opens up, but it doesn't show the Document Libary that you were trying to browse. Browsing web folders was fine in IE6, but something seems to have changed with IE7. Typically in IE6 when you would double click on a folder, it would then pass that off to Windows Explorer where you could then browse and access the files. The web folder would be set up as a Network Place. It seems with the "(null)" error that IE7 is not correctly passing the information needed to Windows Explorer.
If you manually go in and add the web folder as a network place in Windows Explorer, then you can browse and access the files fine.
Another way to deal with this issue is to switch back and forth between the "All Documents" view and the "Explorer View" when navigating the document library. You can browse folders in the All Documents view, and navigate to the folder you want to be in, and then switch back to the Explorer View. It also seems that you can copy-and-paste or drag-and-drop entire folders in the Explorer View... you just can't open them.
These are a few ways to work around this issue, but ultimately this seems to be a bug with IE7 that needs to be resolved.
It is also possible that this is only an issue on computers that do not have Microsoft Office on them. Some of my testing seems to support this, but I cannot confirm it. Hopefully this error isn't by design, seeing how the next version of SharePoint is called the Microsoft Office SharePoint Server. I wouldn't think so, as this seems to be an issue with all Web Folders, and not just those in SharePoint.
NOTE: Further testing seems to indicate that this is just a problem for computers that do not have Office 2003 or later but have IE7. Computers with IE7 and Office 2000, or no version of Office experience this problem when accessing the web folders in the Explorer View, where this wasn't an issue with IE6.