Create and then rename a new folder

Ok, try doing a repair install. Which preserve your files, programs and settings than clean install.

Do you have Windows 7 installation CD?

I think you will find this is not malware related. Nor is this issue reason enough to 'repair' or reinstall your OS.

This 'Item Not Found' issue first came to light in April 2010 when those of us who
had disabled 'Libraries' installed Windows Update KB980408. (My hunch is that you
have you disabled Libraries -- as I have.)

The issue was also resurrected on some systems with an update in July of this year.

If you were to google 'KB980408 item not found' you will have lots of reading to do.

If you would like a simple fix, head over to:

this page

go to Pg 2, download and apply the posted reg fix. Worked for me and a multitude of
others..

(back up your system first)

Of course, all this at your leisure when you have completed your projects.

Glad you had it fixed.