Windows Explorer on XP SP3 is behaving oddly.

In the Folders two-pane view, I am accustomed to browsing through the contents of my folders by highlighting a folder in the left pane, then using the cursor-down key in the left pane to move to the next folder, and the next one etc. And using the left and right keys to expand/collapse folder trees. The current folder remains highlighted in blue, and when I press Down the next folder is highlighted.

On this computer when I press the cursor-down key, the next folder content is viewed as I expect, however the highlight disappears from the folder list in the left pane. The current folder is shown with an underline instead of being highlighted in blue, and pressing the down key does nothing.

1. This is frustrating.
2. Even more frustrating is that this behaviour is inconsistent. Sometimes it works as I expect, and other times it does not.

I have used some tweak tools to compare all sorts of setting among different computers. As far as I can tell everything is set the same.

Any help or ideas would be appreciated.

More Info:
It seems to depend on how I launch Windows Explorer.

It works fine when I start it by selecting My Computer from the Start menu.
However the odd behaviour happens when I start it using the WindowsKey+E keyboard shortcut.

Can anyone explain why that would be?

The computer came with a utility called hptoolset, which was messing up Explorer. I uninstalled the app and the problem went away.