I personally think the current view is better with a few minor adaptions. Change the dialog title to make clear it is for browsing folders and make the Save button a Select button instead and remove the special Select current folder button.
I understand that the way it is now is because of limitations in the File dialog in earlier Windows versions, but with LabVIEW 2010 approaching and probably dropping support for any Windows version before XP, this should not be a real problem anymore.