Similar to this question, after running the following code the browser dialog does appear with all the correct buttons, but the selection area that usally displays available folders is missing:
[void] [Reflection.Assembly]::LoadWithPartialName( 'System.Windows.Forms' ) $d = New-Object Windows.Forms.FolderBrowserDialog $d.ShowDialog( )
I encountered this problem a while back and found the following COM workaround on the MSDN forums:
http://www.microsoft.com/communities/newsgroups/en-us/default.aspx?dg=microsoft.public.dotnet.framework.windowsforms.controls&tid=3607557a-43b3-40bf-8276-be00526e0520&p=1