Windows 7: Not responding when browsing desktop for uploading a file

Hi,
No matter if I use Chrome or Firefox my computer freezes and ends up to "not responding" if the browser opens up initially on desktop folder for uploading a file to any websites. Any thought on this?

Several miscellaneous thoughts:
Have you tried another browser like IE9 for example?
Is this a recent problem that could be corrected by System Restore?
Have you downloaded something recently that could be conflicting with your Chrome or Firefox?
Could you be having a networking or other internet connection problem?

Same thing happens with IE, the upload box freezes on desktop folder. I had no problem until yesterday. I noticed that same problem occurs when I try to download something on desktop. I just deleted all the new files I had on my desktop, but no luck.
I would rather not use System Restore now and detect the problem and solve it. I have a web server on my windows and I don't know if System Restore affects the changes I made to it since yesterday.