To backup the favorite bookmarks in Internet Explorer(IE) 5:

1. Start IE and in the menu File select the item Import and Export...
2. Select to Export Favorites
3. Select what folder(Includes subfolders) to export
4. Select Export to a File or Address and select a location where to save the HTML file which will contain the favorites

To restore the favorite bookmarks in IE5:

1. Start IE and in the menu File select the item Import and Export...
2. Select to Import Favorites
3. Select Import from a File or Address and browse to the location with the HTML file which contains the favorites.

To see/change the location of the Favorites Folder (Easier to use Tweak UI):

[HKEY_CURRENT_USER \Software \Microsoft \Windows \CurrentVersion \Explorer \Shell Folders]
[HKEY_CURRENT_USER \Software \Microsoft \Windows \CurrentVersion \Explorer \User Shell folders]
Favorites = "C:\Windows\Favorites"

More Info MS KB158787
More Info MS KB167124