I think this is a limitation of the particular version of the OS. Look up this article on MSDN.
To resolve problems when the directory
structure exceeds MAX_PATH, use either
of the following methods:
On the server that contains the long directory structure, access these
files and folders through a local
redirection ("net use" or "subst") of
the same share/folder that the network
clients access across the network.
In Windows NT Explorer, select the folder one level above the folder
that returns the error. Right-click
the folder returning the error and
then click Rename. Rename the folder
to reduce the number of characters
used in the folder name.
Read this MSDN page as well on max path length restrictions.
Another interesting read on the Joel on Software Discussion Group.