From Qi Tech:
Link Folder is a Windows shell extension which creates folder links to existing folders. A folder link is a junction point or symbolic link, which points to another folder called a target folder on the same file system. The folder link appears as its target folder in a different location and is transparent for any Windows application and and user operations. It is like a symbolic link for directory on Unix systems. If you create a folder link by linkd.exe from Microsoft Windows 2000 Resource Kit, deleting the folder link will deletes files in the target folder without warning.
This is a big problem impeding people to use the junction point feature provided by new Windows versions. This problem is resolved by Link Folder. If Link Folder is installed, it detects if a link folder will be deleted. When a link folder is deleted, Link Folder removes its junction point first before the link folder is deleted. It shows an overlay icon on each link folder to indicate that it is a link.