Shortcuts getting copied to c:\ - or my "Internet" folder

Whenever I launch a shortcut from TLB 2.2 (normal or beta), said shortcut will be copied to c:\ . I had to rename my "Internet" directory to "Internet Tools" because these copied shortcuts were filling up the "Internet" directory. All my directories in TLB are virtual folders pointing to some directories in my user's start menu.

WinXP Pro SP1 all updates