So what, when you double click, it searches?
I have a sort of a tacky fix, but it'll at least open up the window. It'll be sort-of like Windows 95 though, each folder will open in a new window.
Open My Computer,
Go to Tools > Folder Options
Go to File Types
Wait for it to load the Registered File Types
find "Folder (has no extension)"
If you already have "open" for "Folder", then just set it as the default. Skip the rest, and just click close.
Click Advanced
Click "New..."
For Action, put "open"; for Application used to perform action, put "explorer.exe"
Click OK, then click "Set Default"
Click OK again
and click close.
Hope this helps.