I know this is an old thread, but in case someone else like me comes along later via search engine...
If you're running IE7 under WinXP, in order to run Windows Explorer with the runas command, it must be run as a separate process. A quick way to do this, without having to change your Folder Options settings, would be to run an instance of Explorer with the undocumented parameter /separate, like this:
runas /user:domain\username "explorer /separate"
...where domain is the domain name or local computer name of which username is a member.
Hope this helps.
With IE6 I could do the job, then with IE7 I couldn't (but I didn't know why). Obviously the same things that apply to IE7 apply to IE8 that I have now too.