Windows XP SR3. Had a couple users as a stand alone - one could log into them yet - not connected to server.
Now a workstation with current user being the third (just saying since I think my be source of problem). Anyway, workstation user right clicks on desktop looking to select "new" and chose to make a "new" folder. System hangs - too long to wait out though I suspect if one waited it would eventually offer the "new" options.
If in Windows explorer, selecting new folder works fine btw.