Do you know for sure what the "folder" was that you double clicked on. It did sound a lot like a ZIP file which can look like a folder (and even act like it). If the ZIP file has folders in it you can see the folders also. I don't know what this ZIP file was? But i'm guessing it could have been some file you downloads that was pretty big. If you did unzip the file and you didn't have that big of hard drive that would slow your computer down. XP uses space on your hard drive as extra RAM. Things that XP doesn't need right away it puts on your hard drive to use the RAM for more important things.
It does seem surprising that you would either be out of Hard Drive space . Can you check how much space you have. What was the Folder you where in?
I was using my laptop like normal yesterday, just going through some websites. And then I opened up a folder and I noticed something weird. Whenever I tried right clicking on a file, it would give me limited options. It wouldn't give me the usual "Open" or "Open with" or "Explore" etc, it would just show "Extract" "Add to archive" the usual winrar options. And then all of a sudden I tried again and I couldn't right click at all. So I closed the folder and reopened it and it was even worse. I noticed parts of the folder were missing. Not like literally missing but stuff that was supposed to be there wasn't there. Like the whole section that says "File, View" etc was gone and the whole left side of the folder was gone. So I closed it and opened up firefox and the browser was all black for some reason.
Later I tried to open up winamp and I noticed I couldn't minimize it or click certain buttons on it. And when I tried to start a chat on Skype (instant messaging program) I couldn't. It then gave me the error: "System error: not enough storage to carry out operation" or something similar to that.
I realized later that I could only do certain things if I only had one thing open. I can't use Skype if Winamp is open and I can't open folders if Firefox is open, etc.
I don't get it though. I didn't do anything, why is acting up all of a sudden. I have 1 gig of RAM on my laptop, so I don't understand the problem. I think if I do a system restore it should fix it but I don't want to risk it and mess it up or something. Help appreciated.