No bug in Windows (XP and 2003) has annoyed me more than the one I just
learned how to get rid of.
For no discernible reason, while using the Windows Explorer the treeview
on the left would just go bananas and display multiple Desktop
icons. As seen in the following image. The additional Desktop icons sometimes had
other Desktop as children. A recursive bug, nice.

I had been experiencing this bug for many years in both XP and 2003. The
most frustrating part of it was that anyone seemed to have seen similar
bug on their boxes. I had that problem in every single XP or 2003
boxes I had ever had. Including virtual machines. That led me to believe
it must have been caused by some software that I use on all boxes.
Nope. Keep reading.
After years of internet searching for people with similar problem, posting to
message boards, and almost scheduling an appointment with a shrink, today I
found this thread with other poor souls suffering of
the same pain.
Without further ado, I present you the culprit.

Yes, my friends. The seemingly innocuous and handy Desktop
taskbar toolbar has been that thorn, that little and continuous
disturbance that contributed to loss of precious hours of my
working and leisure time (when computing all the times it happened
in the last 6+ years I've been on Windows XP). Removing that toolbar from my taskbar made the problem go away.
I have the same toolbar on my Vista and 2008 taskbars and have yet to see that problem there.
Apparently an abysmal fraction of Windows users care for that
toolbar so nobody cared to report the bug. That or everybody else was aware of
that bug and skipped the toolbar altogether. In either case, poor me :)
Today I'm glad to cross out that problem from my infinite list of things
to figure out some day. I can still get a working Desktop toolbar by
adding a new toolbar that points to the Desktop directory
in my user profile directory. It does not combine with All users but it's good enough for how I use it.