How to Limit "Favorites" tab to Only Display Internet Explorer Folders

I apologise for in advance for not being able to ask the question clearly, but if I could do THAT I could probably figure this out on my own.

Win7 is different in that the "Favorites" drop down menu has EVERYTHING on my entire computer, and I have to manually poke arond and figure out where the folder(s) I want and avoid accidentally clicking that which I do not.

And I NEVER want to access my C:\Windows folder when trying to find a Favorite that I saved some time in the past, because it would be more convenient to find the link in my favorites folder instead of poking around looking for it again online.

So instead of poking around in the morass of the internet, I'm poking around in the confused mess of my own hard drive.

When I try to "delete" this folders, I discover they aren't actually "shortcuts" to the computer's folders & files, the are the ACTUAL folders & files, and so after deleting a bunch of files off the desktop, I've come to the conclusion that this is serious and need to be fixed. Any help in this regard would be much appreciated and thanks in advance.

Thanks for the response Brink. It's the weirdest thing. I had "My Desktop" listed in my Internet Explorer Favorites, and several other "system" icons. I thought, all I had to do was delete them, as they are short-cuts, but when I did, it started deleting all the files & folders on (for example) "My Desktop".

So I tried a different way of deleting these icons, rather than going through IE8, I navigated to the correct folder using Windows Explorer and when I deleted those icons, they were just short-cuts and none of the real data was actually deleted.

I've been around for years messing with this stuff, and have never seen anything like it. Have you?
Malware?

I have no evidence of infection, and never have in the year since I've owned this computer. I thought it might be some odd "feature" of Windows 7, or maybe IE9.

Could it be related to the fact that I disabled "show hidden files & folders"?

Also, I got the computer used, so there's no telling what happened before I got it. Very weird though, and dangerous too, which is why even though my problem is fixed, I'm still wanting to document it and it's possible causes and solution. Thanks again.