Renaming, moving or deleting 'New Folder' could make some programs not work. Are you sure you want to do this?A quick registry search for "New Folder" with Nir's RegScanner turned up the culprit:
[HKLM\SOFTWARE\Microsoft\Windows\CurrentVersion\App Paths\HijackThis.exe]Deleted the crufty key, logged off and on, problem solved.
@="C:\Documents and Settings\username\Desktop\New Folder"
/windows | Nov 04, 2009