Windows Vista users may be surprised to know that they actually have two different versions of the places bar in Windows Explorer. The places bar provides access to several links on the system, for example to the desktop and the My Documents folder.
Windows Vista users can either see the five old locations on the left side of Windows Explorer if an application makes a call to the function of the old Api which was left in for backwards compatibility or something that is called Favorite Links which provides access to way more folders and resources that you can customize to your liking.
A location on the hard drive is being used to store shortcuts to all folders and special folders that are shown in the Favorite Links panel. That location is by default C:/Users/username/Links. It can vary depending on your setup.
The easiest way however to add links to the Favorite Links is by dragging and dropping them right into the Windows Explorer window. Another possibility would be to open the location on the hard drive and drag and drop shortcuts into it. You can naturally remove any shortcut in the folder to remove the link from the Favorite Links panel.
That panel can be deactivates as well. If you do not need the Favorite Links panel and prefer a full screen Windows Explorer view without a side panel you can deactivate it by pressing the Organize button and choosing Layout > Navigation Panel from the menu.
Update: Microsoft has improved the sidebar of Windows Explorer further in Windows 7. The option is now called Favorites and allows you to drag and drop any folder to its location. The main benefit of doing so is that you get direct access to the folder from any location in Windows Explorer regardless of the folders actual location in the drive's folder structure.
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