Remove the links folder from your Favorites menu and prevent it from returning.
Navigate the the location below in your registry.
Modify or create a new REG_SZ value named "LinksFolderName" and leave the value blank. Once you have done this, open IE and delete the links folder. This will prevent the links folder from being recreated mainly because all file and folders must have at least a one character name.
Optionally, if you can also right click on the links folder, select properties and put a checkmark in the "Hidden" attribute checkbox.
This same trick works on the Start Menu as well. For instance, if you want to hide some folders such as startup, accessories, just enable the hidden attribute. Even if you have the option of "Show hidden files and folders" enabled the folders will not show up in the Start Menu.
Key:
[HKEY_CURRENT_USER\Software\Microsoft\Internet Explorer\Toolbar]
Value Name: LinksFolderName
Data Type: REG_SZ
Data: (blank/null)
