To avoid cluttering up your screen with lots of Tracker windows, hold down the right Ctrl key (or left Win key) when double-clicking a folder. This will simultaneously open the clicked folder and close the current window.
The right Ctrl key, by the way, also maps to:
Intel: The left windows key
PPC: The option key (both sides).
Note that this trick also works with the folder pop-up at the lower left corner of every Tracker window!
If you want to do this entirely from the keyboard, skip the mouse and add the Alt key to the mix: Win+Alt+up will open the parent folder while closing the current one, while Win+Alt+down does the opposite.
By the way, all of these tricks work with documents or application icons as well!