Cannot Create Folders

I have always been able to create sub folders by using the menus or by right clicking on the highlighted folder. All of a sudden this capability is gone. Nothing happens when I click on "New Folder" in the top menu. If I highlight the folder and rignt click the only choice given me is to create a "Briefcase." HELP!

Windows 7 Home Premium, Version 6.1 (Build 7601: Svc Pack 1)

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