This is an extremely annoying bug in Windows 7. Because of so many user complaints going on for YEARS, Microsoft finally called it a "bug" instead of a "feature". However, Microsoft isn't going to fix it in Windows 7, but they finally did fix it in later versions of Windows 8 before final release. (Microsoft's ongoing business model of actually profiting from bugs by making users pay for upgrades that fix basic design flaws -- or maybe don't.) See
http://answers.microsoft.com/en-us/windows/forum/window... HERE'S A FIX: Install the solid freeware app Classic Shell, which tweaks both Explorer and Start Menu behaviors. Among many useful features, it has one called "Fix folder scrolling" that solves the problem of the selected folder jumping to the bottom of the pane.
Also, there is another closely related "feature" annoyance you can fix in Classic Shell. Disable the folder pane's horizontal scrollbar, and the folder list won't suddenly jump to the right when clicking on a folder with a long path. You can still see the full name by hovering the cursor over what you CAN see.
A few independent programmers can fix these problems, but Microsoft's army of well-compensated coders can't. Well, not CAN'T -- it's WON'T. Their managers won't let them. There's not a dime in profit in fixing these bugs for current users, so they won't. Security fixes are different, however, primarily because of liability issues for Microsoft.
Tutorial:
MS forum:
