For Windows XP
There is a free Microsoft Power Toy called “Open Command Window Here” that can be downloaded at this link. Install this small file and the right-click context menu for folders will contain an entry “Open Command Window Here.” All you have to do is right-click a folder and select this entry to get a command window that is referenced to the folder.
In the newer versions of Windows, you do not have to install anything. Simply hold down the Shift key and right-click a folder. The context menu will contain an entry, ‘Open command window here.”