http://bugs.winehq.org/show_bug.cgi?id=24556
--- Comment #8 from Damjan Jovanovic damjan.jov@gmail.com 2010-10-08 00:16:42 CDT --- DLL comdlg32, file filedlg.c, function FILEDLG95_LOOKIN_InsertItemAfterParent calls itself recursively. Whatever it's expecting to happen to stop the recursion doesn't happen, causing a stack overflow.
Patching the function to fail if the PIDL's parent is itself fixes the problem.
However if you're running Wine in a C: sandbox, you probably won't be thrilled to discover it now allows you to browse / in the file dialog :-).