mackrich--There are no "Windows Live Mail Back-Up folders " created by default. (Same for OE.)
If you created them, then they would be where you put them.
It sounds like you are referring to the Store Folders which in each email system contains the actual email messages (though encoded so you cannot read directly) and from which you are viewing the messages when you open the folders in the Folder List, such as Inbox, Sent Items, etc.
http://email.about.com/od/livemailde...ore_Folder.htm