I've just discovered that the System Tray in Windows 2000 displays a long, long list of recently opened folders and files. Just to see what was there, I used the sizing arrow to pull up the System Tray to 3 rows deep, and the Folder-File list got longer and longer and longer.
So two questions:
1. What's the purpose of this list?
It seems to be pretty much a redundant list of what's in Windows Explorer, only in order by use.
2. Can I eliminate the list without harming the actual folders or files? And if Yes, how?
I don't think this is a "native" feature of Windows 2000, from your description it looks like a utility.
Can you find something with "Recent Documents" or similar in its name in the Add or Remove Programs control panel?
If so, you should be able to uninstall it from there.