This is a long-winded question for what I hope has a simple answer.

I have recently started using Windows XP and one aspect of it is
driving me crazy.  On all of my computers, I store all of my data in a
directory close to the root directory called /usr/name1.  In order to
avoid hassle, I change the "My Documents" shortcut to point to this
directory.  I also put a shortcut to /usr/name1 (NOT "My Documents")
on the desktop to facilitate access to the directory.  I also have
other useful directories in /usr such as /usr/setup, /usr/name2, etc. 
I don't access those directories as often as /usr/name1 but often
enough.  On my other computers, when I open the shortcut to
/usr/name1, I can hit the up directory button and it puts me in /usr. 
In Windows XP, the shortcut defaults to opening "My Documents" instead
of /usr/steps.  I think this is backwards.  I think the shortcut
should point directly to the target, not an alias that happens to
coincide with the target.  Of course, it appears to be the same
location but when I hit the up directory button, it puts me at the
desktop rather than /usr.  Then I have to click 4 different times just
to get up one directory to /usr.  I don't want to change the "My
Documents" location to /usr.  I don't want a seperate shortcut to
/usr.  I just want the shortcut to open /usr/name1 and allow me to
click "up directory" and put me at /usr.  Will someone PLEASE tell me
how to do that?

I can't offer you the answer you want to your problem.  I did notice
the same thing happening on my system.

But you could of course put a shortcut in you /usr/name1 directory
that points to /usr.  It is a bit of a fudge but it does save on
having to click several times.