Iphone

A couple of things.
First, if you right click a Favorite via the traditional menu bar (not the Favorites Centre) and select properties, the properties window will appear behind IE7. To avoid the problem, right click a Favorite in the Favorites Centre and select properties.
Second, if you cannot see your Favorites in the Organise Favorites window in IE7, it may be that the folders have lost their system attribute. This can be fixed by opening a CMD window and running the following command (edited to suit your installation environment):
ATTRIB -S C:\Documents and Settings\username\Favorites /S /D
Some have gone the whole hog and run this command - it does not seem to do any harm, apart from throwing an error about not being able to set the attribute on a file or two:
ATTRIB -S C:\Documents and Settings\username\Favorites\*.* /S /D