As of right now I am have the same problem with my show/hide hidden folders option. I ran the above vbs and it has so far not fixed the situation. Also, with the C drive instead of opening when double clicked, the "select a program to view this file" window pops up. This doesn't happen with the CD drive or any of the USB drives.
I did recently remove a virus so I am relatively sure it is a registry problem I simply don't know where. If it is any help I'm running XP Pro with SP 3.