The symptom of this problem is every time you select the Show hidden files and folders options under Folder Options, the screen just flashes when you click OK and the hidden files and folders are not unhidden. You can fix this problem with a registry hack:
1. Click Start > Run and type REGEDIT
2. Click the plus sign next to HKEY_CURRENT_USER
On the right side, double click the hidden value and give it a value of 1.
You should now be able to enable hidden files and folders.
This is a issue caused by virus, so please make sure to use a updated virus scanner.
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