This section lets you configure how Opus handles certain virtual folders. These are folders that do not relate to a physical location on a disk - that is, they can not be represented by a traditional path like C:\Users\. There are many virtual folders provided by Windows - some common examples are This PC (or Computer under Windows 7), the Desktop, Network and so on. Third parties can also implement virtual folders via so-called "namespace shell extensions".
For most virtual folders, Opus provides a display of the folder by "hosting" Explorer within the file display. This lets you see the folder and interact with it in the same way as you would in Explorer itself (primarily via drag and drop, cut and paste, and context menus).
For the two most commonly used virtual folders - This PC and Desktop - Opus has the option of providing its own display (known as "native display") instead of hosting Explorer. The advantage of this is that then the full gamut of Opus functionality is available, including folder formats, configurable colors and images, and (for Desktop) Opus commands like Advanced Rename, etc. For the most part the Opus-provided displays of these folders will look exactly the same as the hosted form, so you may not even realise it is Opus and not Explorer providing the display.