We have tried modifying the code  in folder
items.xsl
in the following manner .PSA
try this out. there is some property called is
Iscollection which is used to detemine if an object is
folder or document.

Managed to get that working, and have amended almost all links so
that docs  open in new browsers. Still have one place left which is
driving me mad!!

Does anyone know where the files that create the version history page
are kept? I have looked for standalone dashboards and xsl
stylesheets and can't find anything. Any ideas would be appreciated
regarding this page

where do you put the target="_blank" tags  please?
Am Working with the News and Categories webparts.

for categories you need to modify the
categoriesitempart.xsl and for the news wepart you
will
need to modify the xsl  in the webpart  settings itself

The target="_blank" goes into the <a> tag. Example:
<a target="_blank" href="http://servername/workspacename/dashboardname">click here to open  in a
new window</a>

but the categories needs
to differentiate between documents  or categories, in the same way as
the folders items  needs to differentite between folders  and documents
(in my previous posts). I have a hunch that it is matter of testing
the iscollection property of the item in the xsl  code again. As if
you just change the <a> tag to < target="_blank">, every time you try
to navigate through the category heirarchy, it will open  a new
browser.