Hi,
forgive me but have a newbie question I cannot figure out - spent 
several hours with documentation and searching the net...

Don't see why the following buffer is not folded after running "cntl-c / 
m AUTO" (bound to org-sparse-tree command), the hits are only 
highlighted in yellow:


What I expect would be:


I tried this on two machines (with different file contents), one linux, 
one Windows-7 (shown here).
I have org-mode v 8.2.7a and GNU emacs 24.3.1.

my .emacs file:
;(cd "C:/Users/hkalldin/Desktop")
;(setq default-directory "C:/Documents and Settings/hkalldin/Desktop/")
;(global-set-key (kbd "C-x C-f")  (lambda () (interactive)
;                                     (cd "C:/Users/hkalldin/Desktop")
;                                     (call-interactively 'find-file)))
(package-initialize)

; basic ASCII printing to default printer:
(setq printer-name "//HANSKLTW7/sharedJ6400")

;; org-mode: The following lines are always needed.  Choose your own keys.
(require 'org-install)
(require 'org-habit)
(add-to-list 'auto-mode-alist '("\\.org\\'" . org-mode))
(global-set-key "\C-cl" 'org-store-link)
(global-set-key "\C-ca" 'org-agenda)
(global-set-key "\C-cb" 'org-iswitchb)
(global-set-key "\C-cc" 'org-capture)
;;(transient-mark-mode 1)
(custom-set-variables
  ;; custom-set-variables was added by Custom.
  ;; If you edit it by hand, you could mess it up, so be careful.
  ;; Your init file should contain only one such instance.
  ;; If there is more than one, they won't work right.
  ;; '(org-agenda-files (quote ("~/kal.org")))
  ;; '(safe-local-variable-values (quote ((eval 
org-display-inline-images))))
  )
(custom-set-faces
  ;; custom-set-faces was added by Custom.
  ;; If you edit it by hand, you could mess it up, so be careful.
  ;; Your init file should contain only one such instance.
  ;; If there is more than one, they won't work right.
  )

I've also attached the org file in question.

What am I doing wrong?!

Many thanks in advance
/Hans