Your client does not support opening this list with Windows Explorer

Issue:- SharePoint Windows Explorer View not working on IE 8
Env:- Windows Server 2008, Windows 7
Error:- "Your client does not support opening this list with Windows Explorer"

Resolution / Workaround:
1. On Windows Server 2008 Install "Desktop Experience" Feature. This will install the "Web Client service. Keep it to Automatic and make sure its Started.
2. Use IE 8 32 bit version and browse the SP site and check the explorer view. By Default it will open IE 8 64 bit version which continues to give the error regardless the "Web Client" service being started.

Note:
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Note sure about the difference between this behaviour in IE 8 32 and 64 bit versions. But on both Windows server 2008 and Windows 7, both the versions are installed by default.

Change Secondary Schema to IE7 for SharePoint Designer 2007

Error:- "In Internet Explorer 6.0 the tag "" is not permitted.

In SharePoint Designer 2007, we need to change the Secondary Schema to IE7 so that certain tags would render without any errors.

On the machine where SharePoint Designer 2007 is installed:
1. Browse to %SystemDrive%\Program Files\Common Files\Microsoft Shared\OFFICE12\SCHEMAS\HTML
2. Copy the IE6_0.XSD and then rename the copied file to IE7_0.XSD
3. Open the IE7_0.XSD file using Notepad or Visual Studio and edit the following lines:
<-- xsd:schema color="#ff0000" targetnamespace="'http://schemas.microsoft.com/intellisense/<--font" version="1.0"><--xsd:schema color="#ff0000" targetnamespace="'http://schemas.microsoft.com/intellisense/<-- xsd:schema version="1.0" targetNamespace='http://schemas.microsoft.com/intellisense/ie7' elementFormDefault='qualified' xmlns='http://schemas.microsoft.com/intellisense/ie7' xmlns:xsd='http://www.w3.org/2001/XMLSchema' xmlns:vs='http://schemas.microsoft.com/Visual-Studio-Intellisense' xmlns:fp='http://schemas.microsoft.com/FrontPageScripting'
vs:clientom="ie6_0dom.tlb"
vs:ishtmlschema="true"
vs:isserverschema="false"
vs:htmlflavor="4.0"
vs:MultipleScriptLanguages="true"
vs:cssschema="CSS 2.1"
vs:SuccinctFriendlyName="Internet Explorer 7">
Note: the DOM reference for client side IntelliSense (vs:clientom=”ie6_0dom.tlb) remains the same.
Save and close the file.

Next, open your registry and browse to:[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Office\12.0\Common\Schemas\] Note: This is on 32bit version machines

If you are using Windows Server 2008, 64bit machine
HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node\Microsoft\Office\Common\Schemas

Create a new key and name it ie7_0.xsd and then create the following string values:
Value Name:- Abbrev Name
Value Data:- IE7
Value Name:- File
Value Data:- html\\ie7_0.xsd
Value Name:- Friendly Name
Value Data:- Internet Explorer 7.0
Value Name:- URI
Value Data:- http://schemas.microsoft.com/intellisense/ie7

Now, restart SharePoint Designer 2007 and click on Tools > Page Editor Options… In the Secondary Schema drop down select Internet Explorer 7.0. Click OK.