The Shell Folder Tree is shown when you click the Folder button on the Files and Text Tab.
The tree displays both local and network folders and drives. Additionally, you will find check boxes beside each file system entity. Most of them can be checked to mark the folder or drive as the subject to search. If a check box cannot be marked, it means that it does not represent a physical storage (for example, Network Neighborhood folder.)
To hide the tree, click the Folder button again.
If you need to change the size of the folder tree, you can click on the Sizing gripper (see the figure above), and start dragging while holding the left mouse button.