Every time I create a new site and choose the local folder for my files, dreamweaver pulls that folder and the folder above it. For instance I created a folder on the desktop. Dreamweaver then pulled that folder and all other folders that were on the desktop. It also did this when I created the folder in a different location.
I had to create a subfolder within the folder Sites-->Sites-->Bryan's site. Any ideas?
Here's what my site looks like now:
It's a known issue with Vista SP2 and later. The easiest work around is to create a dummy folder in the folder you want to use and select that.
With CS5 coming next month I doubt it will get fixed in CS4 and I hope it will get fixed in CS5.