Update: Found a solution to the problem: Microsoft
Knowledge Base Article - 821164
SYMPTOMS
If you enable the Thumbnail view on your Microsoft Windows
2000-based computer, and then you open a folder that
contains XML files, Windows Explorer stops responding
(hangs) when you click an XML file.
CAUSE
This issue occurs if you have Microsoft Internet Explorer
6.0 Service Pack 1 (SP1) installed. XML thumbnail
rendering does not work correctly on a Windows 2000-based
computer with Internet Explorer 6.0 SP1 installed.
WORKAROUND
To work around this issue, disable XML thumbnail
rendering. To do this, follow these steps. Warning If you
use Registry Editor incorrectly, you may cause serious
problems that may require you to reinstall your operating
system. Microsoft cannot guarantee that you can solve
problems that result from using Registry Editor
incorrectly. Use Registry Editor at your own risk.
Copy the following text to a Notepad document:
Windows Registry Editor Version 5.00
[HKEY_LOCAL_MACHINE\SOFTWARE\Classes\.xml\ShellEx\{BB2E617C
-0920-11d1-9A0B-00C04FC2D6C1}]
@=-
Note: To start Notepad, click Start, point to Programs,
point to Accessories, and then click Notepad.
Save the Notepad file as a .reg file on your hard disk. To
do this, follow these steps:
On the File menu in Notepad, click Save As.
In the Save as type list, click All Files.
In the File name box, type XML.reg, and then click Save.
Locate the XML.reg file that you just saved, and then
double-click it to import the new .reg file into the
registry.
Good Luck
Raj Shah