Hi,
I have been frustrated by the removal of this feature as well. Here is the best solution I have been able to find so far using Windows 7 built in functionality, providing you are willing to get used to having your taskbar docked to the side of your screen.
Make a new toolbar on the taskbar then side-dock the taskbar. You can then arrange the toolbar side by side with the docked programs. I'm finding it an ok compromise. Would be nice if you could set the Start button/orb to sit at the bottom though.
I tried all the 3rd party dock programs but none of them seem to allow you to set the names of folders to be displayed constantly, so it's a bit useless if you have 20+ folders that all look the same until you mouse-over to find out...