Yes, I have already tried that and had the same results.
Like I said, I tried to reproduce this problem on a different machine and could not force the Folders to stay on in My Computer and Network Neighborhood.
I have Windows 98 2nd Edition and this recently started happening... Now I get a "Folders Bar" not just in Windows Explorer but also in Network Neighborhood and My Computer. I have clicked on the "x" it closes fine and I close the window out, which I always assume it saved...
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