When this question was posed to the foremost horticulture extension research person in Virginia, the answer was to take off the top of the basket only, remove the twine from trunk of tree and spread the top of the burlap out from the root ball.
The September issue of Landscape Management had an article on installations & these comments were made:
Remove wire & burlap (or at least some of it). Burlap that extends above the planting hole can act like a wick, drawing water away from the root system. Just snip it off and discard it after the plant is in the ground.
Likewise, the wire basket can also be a bit of a problem, possibly inhibiting lateral root growth. Snip off most of the basket after planting and discard it.
I'm sure we could find another article in one of the trade mags that says leave the basket on. Since 50% of people say to take it off & 50% leave it, I'm going to take the middle road & take some off like this article & Lanelle's source mentioned .
In the last year or two I read a scientific research paper on this topic. The outcome of the research was that the roots will grow around the wires with little effort and little damage to the vascular system. I still remove the top half of the basket, and as much of the burlap as possible unless the ball is falling apart. Eric
I want to thank you all for this post. I had this exact question, but once I logged on I saw that this topic was already being discussed and was again, Lanelle you are dead on. You always seem to have a very acurate & helpful answer. So thanks to every one on this topic.