have you ran an anti spy and virus scanner to ensure that isn't the problem? Spybot searh and destroy is a good one for spyware. Glary utilities is an excellent freeware that will clean your registry. AVG or AVAST are good free antivirus programs.
if all this fails, a XP repair installation should do the trick. I had a similar problem with not being able to send files to email from a folder and a repair install was the only way to get it fixed.
PS. Are you able to copy from one folder to another on the same drive? Maybe there is a problem with your permissions on one of the drives