That reinstall was either a Repair Install, or you reinstalled without reformatting the hard drive first. If you had used the Windows 7 Setup DVD to reformat the hard drive first then that would have deleted everything from the disk and the subsequent install procedure would not have created a Windows.old folder.
Permissions are complicated and I don't pretend to understand it myself. But I know that, in Windows 7, not all is what it seems to be. For example, you may see a "My Documents" folder with all it's sub-folders, ie My Pictures, My Music, My Videos, etc, but they do not really exist. These "My xxx" folders are called "Junction Points" and point to the respective Public folders for each user. They are like shortcuts, and are there because a lot of older, pre-Win 7 software expects to see "Documents and Settings\user name" folders which no longer exist in Win 7.
So, if you are attempting to move, delete, copy, or paste files into or from any of these Junction point folders, you will see this Access Denied error. It's the same in Vista and I decided in my own Vista system to just ignore My documents and create my own, personal, folders and files on the C: drive, and manage those.
I hope that helps.
Mark
I am getting this message if I try to paste content to a folder delete certain folders Etc. I cannot change permissions, always access denied. it is sending me around the twist. E.G. I had to do a fresh install. But I did not get a fresh install rather files that I wanted to get rid of were saved in windows.old. I cannot delete this folder. The reason for the fresh install was that I suspected a virus now it sits in windows.old. Please someone help. I did download and install a file to take ownership. i was told to right click on folder take ownership... a screen showed success repeated dozens of times then closed. i thought great it is solved. I went to add something to the folder 'access denied'

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