3. On the Edit menu, point to New, and then click Multi-String Value.
4. Type AuthForwardServerList, and then press ENTER.
5. On the Edit menu, click Modify.
6. In the Value data box, type the URL of the server that hosts the Web share, and then click OK.
Note You can also type a list of URLs in the Value data box.
It should look similar to the window below.
7. Exit Registry Editor.
8. You will now need to restart the WebClient service on the users workstation so that the registry changes can take affect – can be accessed via the services.msc snap-in.
Organization Distribution Options -
To distribute the following registry entry you could either,
1. Export the registry entry and save it as a .REG file, and then import it on each workstation manually, or
2. You could push out the .REG file using Group Policy as a GPO, or
3. Deploy it across the organization using Group Policy *
*The 3rd item above is the recommended option, and can be done by an Active Directory administrator using the registry wizard in the Group policy Management ConsoleGMPC
The above solution will resolve the issue on end user workstations providing that the SharePoint websites are correctly added to the local intranet zone in Internet Explorer.
If you read this article in hopes of figuring out how to get this working on a Windows Server 2008 machine, you will need to first uninstall the IIS7 WEBDAV feature, and then install the Desktop Experience feature on your server (requires reboot), however these changes do not affect end users as the Open in Explorer option relies on the WebClient service on the end users workstation.