Error using explorer view to upload folder that contains “Bin” sub-folder to SharePoint Document Library

Issue Description:
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We have a folder that has the following structure:
-Photo
--Resources
--Bin
--start.html
When going to a SharePoint (2007 SP2) document library (Shared Documents) and use Windows explorer view to upload the folder we get the following error:
\\SharePointSite\DavWWWRoot\SharePointSite\Shared Documents . Verify the item's location and try again"
After further testing we determined that the issue with the "Bin" folder. So, We have created a new Folder and created an empty sub folder called "bin" and we had the same issue. Other folders move fine.
We had this issue after we upgraded our environment to Windows 2008.
Analysis:
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It seems the issue is related to Windows 2008 platform since I was able to re-produce the issue on other environments. Also, I have created a new virtual environment and installed SharePoint 2010 Beta and we had the same issue. The issue does not happen on Windows 2003 platform.
On windows 2003, we had no issues with uploading a folder that contains "bin" sub folder and users were able to access the contents (in my scenario photos and images). Now, after we moved to Windows 2008 platform, now users can't view the photos/images via the web browser (clicking the file with .html extension). If we even go to the actual images which are located in a sub folder of 'Bib" folder we get "404" error in the browser.

Workaround:

=========

Since the issue is related to “Bin” on Windows 2008. I did the following to resolve the issue:

1. Searched for “Bin” instances on all folders.

2. “Bin” references were found in group.xml file (Resources > mediaGroupData)

3. Opened group.xml and replace all instances of Bin with something else (name does not matter ex. replace all Bin with Binary).

4. Managed to upload the folder without any issues.

5. Was able to view the photo/images