I found a working answer at Microsoft's web site, hopefully cross-linking URLs is allowed but if removed from this forum let me know and I will detail it out here. Proper credit to the true problem-resolvers is contained at the destination link.
There is a registry key that captures the state of the open/close state of the main folders in the left explorer Nav-Pane, which can be set within the explorer left frame, explorer closed to set the reg key, then the reg key value manually turned to read-only. Now when you occasionally open those folders like Favorites or your User ID (or more problematic is many program's File / Open dialog settings will reopen your User folder), after turning regkey read-only, when explorer or application file dialog is closed, the NavPane expanded folders regkey is not re-written, remaining at your preferred expanded/collapsed state.
The Explorer left NavPane state information is stored in the registry key HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\Modules\NavPane. If you delete the ExpandedState registry value, the next time you open Explorer it will show the "default" tree state.
A user also wrote a text batch file (so you can review each line of code to see what it does) to allow you to set explorer as desired, then turn the NavPane state read-only to preserve the state indefinitely. The batch script also allows you to reset the functionality to default windows (turn regkey read/write) and so on.
This is the link to Microsoft site with all details and script file:
http://social.technet.microsoft.com/Forums/windows/en-US/48ebc898-290d-405f-b4d5-c3dc72278b76/collapse-all-foldertrees-when-closing-explorer
As an add-on functionality to the above, I include this info because the comma/space syntax is different for Win7 versus WinXP / other versions that is widely documented on web sites. This sytnax will open explorer to your preferred folder, separate from which folders are expanded / collapsed with the answer provided for the direct question of this thread, but usually directly related to the intent of opening explorer to your specific requirements.
Here are command line paramaters to further open Explorer to a preferred directory in Win7 32-bit Home Premium. Create a shortcut with this command line as the Target:
C:\Windows\explorer.exe explorer /e /root,"C:\" /select,"C:\PreferredDataDir"
Replace C:\PreferredDataDir with of course your preferred directory, including just a reference to the root of C:\ or root of another drive letter if preferred over a subdirectory. The root option specified still allows access to E: drive etc, unlike the published intended effect of the option to limit movement only within the root specified, which may work on other versions of Windows.
%windir%\explorer.exe C:\Users\name\Links
and add shortcuts there, or use the keyboard F4 + escape to type a directory if it's short or if you can paste it