I was on website that showed all folders on my computer in a sidebar. when i selected a folder all the files showed in a text area next to the directories. with a checkbox that could be selected. The all selected files code be uploaded.
It would not be a PHP issue, as it would need to be something running on your PC, not on the server. I would guess it was probably some sort of ActiveX control. (Of course, the server-side script that processes the uploads may well be PHP, but not the part that reads your PC's directories -- which by the way sounds like quite the security hole, so I for one would not install such an ActiveX control unless I really, really trusted that site.)
"Please give us a simple answer, so that we don't have to think, because if we think, we might find answers that don't fit the way we want the world to be."
~ Terry Pratchett in Nation