diff --git a/PowerEditor/src/WinControls/ProjectPanel/ProjectPanel.cpp b/PowerEditor/src/WinControls/ProjectPanel/ProjectPanel.cpp
index b02482816..55e701f69 100644
--- a/PowerEditor/src/WinControls/ProjectPanel/ProjectPanel.cpp
+++ b/PowerEditor/src/WinControls/ProjectPanel/ProjectPanel.cpp
@@ -29,19 +29,8 @@ BOOL CALLBACK ProjectPanel::run_dlgProc(UINT message, WPARAM wParam, LPARAM lPar
         case WM_INITDIALOG :
         {
 			_treeView.init(_hInst, _hSelf, ID_PROJECTTREEVIEW);
-			std::vector<Heading> headings;
-			/*
-			headings.push_back(Heading(TEXT("1-a"), 1));
-			headings.push_back(Heading(TEXT("1-b"), 1));
-			headings.push_back(Heading(TEXT("2-a"), 2));
-			headings.push_back(Heading(TEXT("2-a"), 3));
-			headings.push_back(Heading(TEXT("2-a"), 4));
-			headings.push_back(Heading(TEXT("2-a"), 5));
-			headings.push_back(Heading(TEXT("1-c"), 1));
-			headings.push_back(Heading(TEXT("2-a"), 2));
-			headings.push_back(Heading(TEXT("2-b"), 2));
-			*/
-			_treeView.initTreeViewItems(headings, IDR_ZOOMIN, IDR_ZOOMOUT, IDR_FIND);
+
+			_treeView.initImageList(IDR_ZOOMIN, IDR_ZOOMOUT, IDR_FIND);
 			_treeView.display();
 			openProject(TEXT("C:\\sources\\Notepad++\\trunk\\PowerEditor\\src\\WinControls\\ProjectPanel\\demo.xml"));
             return TRUE;
@@ -157,11 +146,13 @@ BOOL CALLBACK ProjectPanel::run_dlgProc(UINT message, WPARAM wParam, LPARAM lPar
 		return TRUE;
 */
         case WM_SIZE:
-        {/*
+        {
             int width = LOWORD(lParam);
             int height = HIWORD(lParam);
-			::MoveWindow(_fileListView.getHSelf(), 0, 0, width, height, TRUE);
-            */break;
+			HWND hwnd = _treeView.getHSelf();
+			if (hwnd)
+				::MoveWindow(hwnd, 0, 0, width, height, TRUE);
+            break;
         }
         
 		case WM_DESTROY:
@@ -191,7 +182,8 @@ bool ProjectPanel::openProject(TCHAR *projectFileName)
 	if (!root) 
 		return false;
 
-	loadOkay = buildTreeFrom(root, TVI_ROOT);
+	HTREEITEM rootItem = _treeView.addItem((root->ToElement())->Attribute(TEXT("name")), TVI_ROOT, true);
+    buildTreeFrom(root, rootItem);
 	delete pXmlDocProject;
 	
 	return loadOkay;
@@ -207,7 +199,7 @@ bool ProjectPanel::buildTreeFrom(TiXmlNode *projectRoot, HTREEITEM hParentItem)
 		if (lstrcmp(TEXT("Folder"), v) == 0)
 		{
 			//::MessageBox(NULL, (childNode->ToElement())->Attribute(TEXT("name")), TEXT("Folder"), MB_OK);
-			HTREEITEM addedItem = _treeView.addItem((childNode->ToElement())->Attribute(TEXT("name")), hParentItem);
+			HTREEITEM addedItem = _treeView.addItem((childNode->ToElement())->Attribute(TEXT("name")), hParentItem, true);
 			if (!childNode->NoChildren())
 			{
 				bool isOK = buildTreeFrom(childNode, addedItem);
@@ -217,7 +209,7 @@ bool ProjectPanel::buildTreeFrom(TiXmlNode *projectRoot, HTREEITEM hParentItem)
 		}
 		else if (lstrcmp(TEXT("File"), v) == 0)
 		{
-			_treeView.addItem((childNode->ToElement())->Attribute(TEXT("name")), hParentItem);
+			_treeView.addItem((childNode->ToElement())->Attribute(TEXT("name")), hParentItem, false);
 			//::MessageBox(NULL, (childNode->ToElement())->Attribute(TEXT("name")), TEXT("File"), MB_OK);
 		}
 	}
diff --git a/PowerEditor/src/WinControls/ProjectPanel/TreeView.cpp b/PowerEditor/src/WinControls/ProjectPanel/TreeView.cpp
index 2a3211a20..85555cde7 100644
--- a/PowerEditor/src/WinControls/ProjectPanel/TreeView.cpp
+++ b/PowerEditor/src/WinControls/ProjectPanel/TreeView.cpp
@@ -71,23 +71,6 @@ BOOL TreeView::initImageList(int open_node_id, int closed_node_id, int leaf_id)
 }
 
 
-BOOL TreeView::initTreeViewItems(std::vector<Heading> & headings, int idOpen, int idClosed, int idDocument)
-{ 
-	HTREEITEM hti;
-
-	initImageList(idOpen,idClosed,idDocument);
-
-	for (size_t i = 0; i < headings.size(); i++) 
-	{ 
-		// Add the item to the tree-view control. 
-		hti = addItem(headings[i]._name, headings[i]._level); 
-		if (hti == NULL)
-			return FALSE;
-	}
-	return TRUE;
-}
-
-
 void TreeView::destroy()
 {
 	::DestroyWindow(_hSelf);
@@ -99,7 +82,7 @@ LRESULT TreeView::runProc(HWND hwnd, UINT Message, WPARAM wParam, LPARAM lParam)
 	return ::CallWindowProc(_defaultProc, hwnd, Message, wParam, lParam);
 }
 
-HTREEITEM TreeView::addItem(const TCHAR *itemName, HTREEITEM hParentItem)
+HTREEITEM TreeView::addItem(const TCHAR *itemName, HTREEITEM hParentItem, bool isNode)
 {
 	TVITEM tvi;
 	tvi.mask = TVIF_TEXT | TVIF_IMAGE | TVIF_SELECTEDIMAGE | TVIF_PARAM; 
@@ -110,8 +93,8 @@ HTREEITEM TreeView::addItem(const TCHAR *itemName, HTREEITEM hParentItem)
 
 	// Assume the item is not a parent item, so give it a 
 	// document image.
-	tvi.iImage = INDEX_LEAF; 
-	tvi.iSelectedImage = INDEX_LEAF; 
+	tvi.iImage = isNode?INDEX_CLOSED_NODE:INDEX_LEAF; 
+	tvi.iSelectedImage = isNode?INDEX_OPEN_NODE:INDEX_LEAF; 
 
 	// Save the heading level in the item's application-defined 
 	// data area. 
@@ -125,6 +108,7 @@ HTREEITEM TreeView::addItem(const TCHAR *itemName, HTREEITEM hParentItem)
 	return (HTREEITEM)::SendMessage(_hSelf, TVM_INSERTITEM, 0, (LPARAM)(LPTVINSERTSTRUCT)&tvInsertStruct);
 }
 
+/*
 HTREEITEM TreeView::addItem(const TCHAR *itemName, int nLevel)
 { 
 	TVITEM tvi; 
@@ -185,5 +169,5 @@ HTREEITEM TreeView::addItem(const TCHAR *itemName, int nLevel)
 	}
 	return hPrev; 
 }
-
+*/
 
diff --git a/PowerEditor/src/WinControls/ProjectPanel/TreeView.h b/PowerEditor/src/WinControls/ProjectPanel/TreeView.h
index 45a4fd355..133f737eb 100644
--- a/PowerEditor/src/WinControls/ProjectPanel/TreeView.h
+++ b/PowerEditor/src/WinControls/ProjectPanel/TreeView.h
@@ -20,14 +20,6 @@
 
 #include "window.h"
 
-struct Heading {
-    TCHAR _name[64]; 
-    int _level;
-	Heading(TCHAR *name, int level): _level(level){
-		lstrcpy(_name, name);
-	};
-};
-
 class TreeView : public Window
 {
 public:
@@ -36,9 +28,8 @@ public:
 	virtual ~TreeView() {};
 	virtual void init(HINSTANCE hInst, HWND parent, int treeViewID);
 	virtual void destroy();
-	HTREEITEM addItem(const TCHAR *itemName, int nLevel);
-	HTREEITEM addItem(const TCHAR *itemName, HTREEITEM hParentItem);
-	BOOL initTreeViewItems(std::vector<Heading> & headings, int idOpen, int idClosed, int idDocument);
+	HTREEITEM addItem(const TCHAR *itemName, HTREEITEM hParentItem, bool isNode);
+	BOOL initImageList(int open_node_id, int closed_node_id, int leaf_id);
 
 protected:
 	HIMAGELIST _hImaLst;
@@ -48,8 +39,6 @@ protected:
 	static LRESULT CALLBACK staticProc(HWND hwnd, UINT Message, WPARAM wParam, LPARAM lParam) {
 		return (((TreeView *)(::GetWindowLongPtr(hwnd, GWL_USERDATA)))->runProc(hwnd, Message, wParam, lParam));
 	};
-	BOOL initImageList(int open_node_id, int closed_node_id, int leaf_id);
-
 };
 
 
diff --git a/PowerEditor/src/WinControls/ProjectPanel/demo.xml b/PowerEditor/src/WinControls/ProjectPanel/demo.xml
index 4e510f2ee..f41defd91 100644
--- a/PowerEditor/src/WinControls/ProjectPanel/demo.xml
+++ b/PowerEditor/src/WinControls/ProjectPanel/demo.xml
@@ -1,8 +1,16 @@
 <NotepadPlus>
-	<Project name="Notepad++">
+	<!-- projectFile/location  -->
+	<!-- if file name is relative, then  project file current path will be used -->
+	<Project name="Notepad++" >
 		<Folder name="Power Editor">
 			<Folder name="src">
-				<File name="C:\toto.txt"/>
+				<Folder name="src2">
+					<Folder name="src3">
+						<File name="C:\toto.txt"/>
+					</Folder>
+					<Folder name="src3-B">
+					</Folder>
+				</Folder>
 			</Folder>
 			<File name="C:\sources\Notepad++\trunk\PowerEditor\license.txt"/>
 		</Folder>