The first thing I would consider are the aspects of Explorer that still make certain tasks "clunky", even after the improvements offered in XP and Vista. I would like to see a tabbed (IE7-like) interface that makes it easier to work in and among multiple folders. Possibly a drop-down or right-click menu option to open new folder tabs from the same or another hard drive/partition.... or even another network location. Also the ability to tile or dock 4 open tabs or windows per full screen window would be great, see pic:

Here's another thought: take IE7 or any web browser as an example. You have the Favorites menu that allows you to easily categorize and consolidate many similar sites into folders and sub-folders. This reduces so much navigation time to find a site that you've bookmarked in the past, but only visit on the occasional whim. I've done something similar to this with the Start Menu since Win9x days. I created main category folders such as Audio, Video, Games, Productivity, Imaging, Hardware, Utility, Security, etc so that I only have a short list of a dozen or so categories to choose from, but I can still get to whatever shortcut I need by opening a maximum of 3 menu panes. XP ups that to 4 panes with the "All Programs" addition to the Start Menu. To help make opening programs more efficient, I put my most frequently used program shortcuts in the Quick Launch Toolbar.

I've also dabbled with this idea to an extent in the Windows directory structure to get away from the Program Files folder being the "catch-all" directory of anything I've installed. Instead of using the default Program Files install path, most software will let me install my games into the Games folder, Insant Messaging program into the Internet folder, and so on. Categorizing by software type has also proven to be a very handy method of archiving installers on my storage drive. There's no more remembering the name of a program or utility that I used a year or two ago, for example, Audacity. All I have to do in order to find the installer is go to the storage drive and open the folder that corresponds to what type of program it was (Audio), open it up, and look through the list of Audio software installers I've archived.

I hope this has been some food for thought.

Do a search for "Directory Opus" -- not very well known it seems, but that's the best Windows Explorer replacement I've found, plus it is faster than the standard one and noticeably so.