Classic shell 'single click' problem in explorer.exe

I have seen this little issue on Vista and Windows 2008 and would like to
know if others have seen it and might know a fix/workaround.

I have a fresh install of either Vista or W2K8 on a PC and have joined a
domain. The DC is also a W2K8 server.

From the PC I open up explorer.exe and create a folder on the C: drive
(c:\Temp for example).
I add 3 or 4 files to the folder.

Next using explorer.exe (detailed view) I delete one of the files. After it
is deleted I hover my mouse over any of the remaining files.
Nothing happens except maybe the file detail line is highlighted. OK so far.

Now on the DC modify the 'Default Domain Policy' and enable the 'Turn on
Classic Shell' GPO.
User Configuration->Policies->Administrative Templates->Windows
Components->Windows Explorer

Reboot the PC
Using explorer.exe delete another one of the files and then hover the cursor
over one of the remaining files.

I consistently see the files become 'single click' files with the underline.

I can get rid of this by doing the either one of the following things:

1) Click on any folder in the 'folder' treeview on the left side of
explorer.exe. However the problem will return.

2) Close explorer.exe and reopen it. However the problem with return.

3) Disable the 'Turn on Classic Shell' GPO and reboot the PC. Will
permanently fix it.

If you read the 'Explaination' for the GPO it states that you lose this
functionality if you enable the property.

Can you reproduce it? Is it a bug or is there a fix for the classic shell.?

Please no comments of whether or not you should use classic shell. We prefer
it and Microsoft provides it in all current versions of their operating
systems.

Thanks

This problem is really annoying. We got the same problem here on our Win 2008 Server.

Have you figured out a solution for this Ken? Or maybe someone else?