I have the same problem related by Brian.

"I can't seem to create a new folder in Outlook. Whever I choose the command to create a folder it always creates it as a sub-folder of the category my cursor was last on. I couldn't find anything in the Help function on this. Any suggestions? Many thanks. Brian"

Brian solved his issue  unchecking "Hide On My Computer folders".

Im my case, "hide on my computer folders" is and was allways unchecked. and I can not see the root folder.

Please help me. Thanks Daikichi