I started a response to this design decision in another thread but I think it needs to be mentioned here as well.

You're trying to re-create functionality that exists in a file browser on a major OS. You're trying to go against standard Windows practices. Why?

The way I see it you have two choices:
1. Go the way you're going. Create a customized file dialog that doesn't look like normal ones. This will also make it impossible for users to simply double click on their project to open it into your program. This also makes it impossible to simply add it as an e-mail attachment or upload to a website.

2. Stick with the Windows way of doing things (you're developing on Windows after all) and create a customized file type. This type of file (.luaproj) would, itself, contain all of the needed files (much like a Zip file). This allows you to use the built in OpenFileDialog. You can allow users to double click onto the file to launch it. You can even upload the entire project to a website (such as VBForums.com) or e-mail it!

To be honest, rather than trying to work around all these issues; I think you should re-think your design and seriously consider the usability ramifications of your chosen solution.
Quote Originally Posted by Campion
Linux does not operate that way. OSX does because of its Mac heritage of having multiple "forks" to represent a file.
Linux can work that way. The .Application "folder" on OS X is only represented as such in Finder. If you take a look at the actual file system, it's just a regular folder. Also, like a folder, you cannot simply upload a .Application to the web.

You're right, as far as I know no Window server for Linux works in this way but If someone created their own shell for X they could easily recreate this.
Quote Originally Posted by Campion
But, as others have said, it's impossible to run/execute a folder. Windows just does not work that way, and was never intended to, but that's mainly because the file-system setup is the same as it was back when QDOS was just a cheap, stripped-down version of CP/M, and when IBM was still running the PC show. (Of course, DOS, and its derivatives have been vastly upgraded since then, but still retains that file structure setup.)
Like mentioned before, this "feature" is part of OS X's Finder (there are some utility modifications so you can execute them in Terminal as well). Windows could easily reproduce the same thing if you decided to create your own shell.

I wouldn't recommend it but it's not related to the file system.
Quote Originally Posted by Campion
Also, Windows does not support symbolic links like UNIX/Linux does. And with the mass amount of viruses that Windows/DOS has, it's a good thing that it was never implemented.
Actually, Vista has symbolic links. It's not quite the same but its there. I believe the SBU (Subsystem for Unix-based Applications) offered by Microsoft may support this.