The following has worked for another customer with the same symptoms:
Re-installing IE6.0 may resolve the issue.
OR
Installing SP3 may resolve the issue.
OR
Doing the following steps may resolve the issue.
1. Boot in "Safe Mode with Networking" by pressing F8 during startup.
2. Login using the local administrator account (we should see a "Windows
Update"
dialog box stating that the windows is now updating the following items
Browsing Services, Internet Tools and System Services.)
3. Once after logon is over, check by running the explorer. This time we
should see
the tree view.
4. Restart the box and boot normally. After logging in we you should see the
explorer tree view without any issues.