Yeah. OK. That answer has NOTHING to do with the original question.
I can't stand when people just post crap, just see themselves posted...
Here is the CORRECT answer:
Yes, Windows 7 (and Vista) have screwed up the "Backspace" key's behavior to go back instead of up. So when your are copying, cutting, pasting, deleting folders in explorer (that is what explorer IS FOR!) the "back" functionality get all screwed up because there is nothing to go back to.