He's probably out of luck, then.
Since a source code control system has to store a history of each file, using a file system folder structure to do it is pretty near impossible.
If he's willing to consider other source code control systems that don't have that requirement, and don't stink as bad as VSS does, here's my short list in order from free & easy to use, to expensive & "enterprise"
1. Subversion (there's a forum here, and I run this at home)
2. CVS (like Subversion, but older and has some limitations, but it's very common in the Unix world)
3. Vault (Looks/works just like VSS, but uses a SQL Server database as the back end, and runs over web services so remote access is easy)
4. Microsoft Team System (new and unproven, but I've heard good things about it. Expensive)
5. StarTeam (you need a consultant to set it up, but works well for teams of up to 100+ developers)
6. ClearCase (you need a consultant to set it up, but works for large teams, possibly on different continents)
7. Perforce (fast, powerful, expensive. Microsoft uses a custom version to store the Windows source code)
Chip H.
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