TweakUI/Explorer/Uncheck Show Links on Favorite Menu
http://www.microsoft.com/windowsxp/pro/downloads/powertoys.asp
Manual Edits:
There are two methods that can be used to hide the Links folder, one using
the registry and the other using file attributes. Both methods are detailed
below:
Automated Edit:
Remove Links folder from IE/Favorites (Line 93)
http://www.kellys-korner-xp.com/xp_tweaks.htm
Using the Registry - Start/Run/Regedit
HKEY_CURRENT_USER\Software\Microsoft\Internet Explorer\
Toolbar
Set the String value of "LinksFolderName" to equal a blank string. Open IE
and delete the Links folder from the Favorites menu.
The next time you start Internet Explorer the Links folder will not be
recreated.
Using File Attributes
Using Explorer find the location of your Favorites folder (e.g. C:\Documents
and Settings\User Name\Favorites) within that folder will be a sub-folder
named Links.
Select the Links folder and right-click (or secondary click) and select
Properties, check the Hidden checkbox and click OK.
From now on the Links folder should be hidden from the Favorites list. This
works for any other folder or link on the favorites menu as well.
Note: The Links folder must be manually deleted from the favorites menu.
This tweak stops it being automatically recreated.
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All the Best and Happy Holidays,
Kelly (MS-MVP/DTS&XP)
Taskbar Repair Tool Plus!
http://www.kellys-korner-xp.com/taskbarplus!.htm