A folder is corrupt/infected and points to itself. So subfolder is its own parent. Utility could just purge entry from directory table. Then Diskchk can be used to fix misallocations.
-nickedw
You aren't referring to the C:\ProgramData\Application Data in Windows 7 by any chance? This is a (multiple) redirected folder that points to itself (I don't know why, but MS thought it was a good idea). It may be because C:\ProgramData\ is a target of C:\Users\All Users, so legacy apps that use "C:\Users\AllUsers\Application Data" get pointed to C:\ProgramData folder.
There are a lot of redirected folder in Vista/7 (and some even in XP), but I think only Vista/7 have ones that point to themselves.
Cheers