problems navigating to folders

[fbcmusicmark]

I have a Dell, Win XP SP2, MS Office 2007 Professional, that I am having
problems navigating to folders. When I click on "Open" the "Open" box opens
but when I click on the "look in" down arrow, the following box opens
"Initalizing Folders" box opens, and then when I try to go anywhere else it
just sits there. Any suggestions?

 

[7zm]

Follow up: This same action happens in all of Office 2007 products, Word,
Access etc.

I have the same problem. I hope someone answers this.