The change you made for 8.0i disables the TDI filter driver. It's relevant in that the folder redirection means network traffic is involved, but that's it.
For 8.5i and later, the TDI filter driver changed names. Now it is MFETDIK.sys. It cannot be disabled via the registry though. To disable it you must rename the file.
If that works, you may want to look at updating your network-related drivers, especially if it's Vista or later. Microsoft's TDX driver, which provides a backward-compatible shim to our TDI driver, is known to have issues. And there are updates for it.