How do I start PowerShell from Windows Explorer?

Question

Is there a way to start PowerShell in a specific folder from Windows Explorer, e.g. to right-click in a folder and have an option like \"Open PowerShell in this Folder\"?

Answer 1

The following is a concise (and updated) summation of the earlier solutions. Here's what to do:

Add these strings and their respective parent keys:

pwrshell\(Default) < Open PowerShell Here
pwrshell\command\(Default) < powershell -NoExit -Command Set-Location -LiteralPath '%V'
pwrshelladmin\(Default) < Open PowerShell (Admin)
pwrshelladmin\command\(Default) < powershell -Command Start-Process -verb runAs -ArgumentList '-NoExit','cd','%V' powershell

at these locations

HKCR\Directory\shell (for folders)
HKCR\Directory\Background\shell (Explorer window)
HKCR\Drive\shell (for root drives)

That's it. Add the "Extended" strings for the commands only to be visible if you hold the "Shift" key, everything else is superfluous.