Also, when you go to open the Folder Options and click the View tab, both the radio buttons Do not show hidden files and folders and Show hidden files and folders may be enabled.
The above symptoms occur if the system is infected by Malware, which modifies the CheckedValue registry value in these branches:
This ploy is used by many Viruses, so that the hidden file (malicious executable or script) won’t be displayed in Explorer. (REF Google Search Results). Also note that some Viruses remove the above option altogether from the View tab of Folder Options applet.
Registry Fix
To fix the above setting, download foldersettings.reg and save to Desktop. Right-click on the file and choose Merge. This fix can be applied in Windows XP as well as in Windows Vista systems.
Reconfigure the Show hidden files and folders option now. Then update your anti-virus software and run a full system scan. And don’t forget to follow-up with a thorough checkup for Malware.
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