When you save a message as HTML in Outlook 2007 (and 2010), Outlook creates a matching (and annoying) folder containing XML and THMX files, as seen in the screenshot below.
Besides the issue that Outlook is cluttering up the drive and wasting space (although the files total 6 KB, so its not a lot of waste), deleting the folder also deletes the HTML page. Moving or copying the HTML file copies the folder.
This is because the default setting for managing web pages and folders is to set to manage them as a single file.
Workaround
You can't prevent Outlook from creating the folder, but you can change the folder behavior so the folder can be deleted. Go to Windows Explorer's Folder Options. On the View tab, change the Managing pairs of Web pages and folders setting to Show both parts and manage them individually.
Now you can delete the folder without deleting the HTML file too.
Folder Options
In Windows XP, Folder Options is on the Tools menu. In Vista and Windows 7, its at Organize, Folder and Search options. This setting is not visible by default in Windows, it's added by Office XP, 2003, and 2007.
Office 2010 beta does not add this setting to Windows but the Manage pairs reg hack will add it to Folder options so you can change the manage pairs setting. You'll need to change the .txt file extension to .reg then double click on the reg file to add it to your registry. This hack will work with Windows XP/7 and Vista.
More Information
Operations on an HTML file or folder apply to similarly named folder or HTML file (KB Article 252721)
Managing the File System (MSDN)
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Last reviewed on Sep 28, 2011
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