Actually, this isn't a bug, it's just a matter of short-sightedness. They are using a single byte to index the folders. One byte can hold a number from 0 - 255, your 256 limit. Once you hit the 256th folder, the "index" resets to 0, or the first folder (not a random one). So, at folder 257 you get the first folder, at 258 you get the second folder, etc. Poser5 overcomes this limitation as well as the "proportional scrollbar". The 256 limit applies to the number of pz2 (actually, cm2, cr2, etc) files, also. The rsr and/or png files don't count against you.