I think I've found a solution for the audio, and video, skipping when changing folders in winxp.
If you access My Computer through the start menu or quicklaunch, VLC will skip. If you open a folder on the desktop and go one directory higher, to the desktop, and open My Computer from there, VLC will NOT skip. I think there is something wrong with using shortcuts to My Computer which slows down windows or messes with the buffers or something.
I have no idea how to create a "non-slow" shortcut to My Computer though.
EDIT: Wohoo! If you disable "Launch folder windows in a separate process" VLC won't skip no matter where you access My Computer from.
"I am so smart, I am so smart. S.M.R.T, I mean S.M.A.R.T" -Homer Simpson