"Cannot delete desktop: the file or directory is corrupted and unreadable"
No such file "desktop" is actually in the recycle bin.
Here's a hijackthis log that I ran right after a reboot.
Logfile of Trend Micro HijackThis v2.0.2
Scan saved at 20:39:17, on 16/10/2007
Platform: Windows XP SP2 (WinNT 5.01.2600)
MSIE: Internet Explorer v6.00 SP2 (6.00.2900.2180)
Boot mode: Normal
Running processes:
C:\WINDOWS\System32\smss.exe
C:\WINDOWS\system32\winlogon.exe
C:\WINDOWS\system32\services.exe
C:\WINDOWS\system32\lsass.exe
C:\WINDOWS\system32\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\system32\svchost.exe
C:\Program Files\Lavasoft\Ad-Aware 2007\aawservice.exe
C:\Program Files\Alwil Software\Avast4\aswUpdSv.exe
C:\Program Files\Alwil Software\Avast4\ashServ.exe
C:\WINDOWS\system32\spoolsv.exe
C:\xampp\apache\bin\apache.exe
C:\WINDOWS\System32\svchost.exe
C:\xampp\mysql\bin\mysqld-nt.exe
C:\xampp\apache\bin\apache.exe
C:\WINDOWS\system32\nvsvc32.exe
C:\Program Files\CyberLink\Shared files\RichVideo.exe
C:\WINDOWS\system32\svchost.exe
C:\Program Files\Alwil Software\Avast4\ashMaiSv.exe
C:\Program Files\Alwil Software\Avast4\ashWebSv.exe
C:\WINDOWS\Explorer.EXE
C:\Program Files\Razer\DeathAdder\razerhid.exe
C:\PROGRA~1\ALWILS~1\Avast4\ashDisp.exe
C:\WINDOWS\system32\RUNDLL32.EXE
C:\WINDOWS\VM_STI.EXE
C:\Program Files\Common Files\Ahead\lib\NMBgMonitor.exe
C:\Program Files\Messenger\msmsgs.exe
C:\Program Files\Razer\DeathAdder\razerofa.exe
C:\Program Files\Mozilla Firefox\firefox.exe
C:\Program Files\FeedReader\feedreader.exe
C:\Program Files\MSN Messenger\msnmsgr.exe
C:\Documents and Settings\Dan\Desktop\HiJackThis.exe
O2 - BHO: Adobe PDF Reader Link Helper - {06849E9F-C8D7-4D59-B87D-784B7D6BE0B3} - C:\Program Files\Common Files\Adobe\Acrobat\ActiveX\AcroIEHelper.dll
O2 - BHO: SSVHelper Class - {761497BB-D6F0-462C-B6EB-D4DAF1D92D43} - C:\Program Files\Java\jre1.6.0_02\bin\ssv.dll
O2 - BHO: (no name) - {7E853D72-626A-48EC-A868-BA8D5E23E045} - (no file)
O4 - HKLM\..\Run: [NvCplDaemon] RUNDLL32.EXE C:\WINDOWS\system32\NvCpl.dll,NvStartup
O4 - HKLM\..\Run: [DeathAdder] C:\Program Files\Razer\DeathAdder\razerhid.exe
O4 - HKLM\..\Run: [avast!] C:\PROGRA~1\ALWILS~1\Avast4\ashDisp.exe
O4 - HKLM\..\Run: [NvMediaCenter] RUNDLL32.EXE C:\WINDOWS\system32\NvMcTray.dll,NvTaskbarInit
O4 - HKLM\..\Run: [BigDogPath] C:\WINDOWS\VM_STI.EXE USB PC Web Camera
O4 - HKCU\..\Run: [BgMonitor_{79662E04-7C6C-4d9f-84C7-88D8A56B10AA}] "C:\Program Files\Common Files\Ahead\lib\NMBgMonitor.exe"
O4 - HKCU\..\Run: [MSMSGS] "C:\Program Files\Messenger\msmsgs.exe" /background
O4 - HKUS\S-1-5-19\..\Run: [CTFMON.EXE] C:\WINDOWS\system32\CTFMON.EXE (User 'LOCAL SERVICE')
O4 - HKUS\S-1-5-20\..\Run: [CTFMON.EXE] C:\WINDOWS\system32\CTFMON.EXE (User 'NETWORK SERVICE')
O4 - HKUS\S-1-5-18\..\Run: [CTFMON.EXE] C:\WINDOWS\system32\CTFMON.EXE (User 'SYSTEM')
O4 - HKUS\.DEFAULT\..\Run: [CTFMON.EXE] C:\WINDOWS\system32\CTFMON.EXE (User 'Default user')
O9 - Extra button: (no name) - {08B0E5C0-4FCB-11CF-AAA5-00401C608501} - C:\Program Files\Java\jre1.6.0_02\bin\ssv.dll
O9 - Extra 'Tools' menuitem: Sun Java Console - {08B0E5C0-4FCB-11CF-AAA5-00401C608501} - C:\Program Files\Java\jre1.6.0_02\bin\ssv.dll
O9 - Extra button: Messenger - {FB5F1910-F110-11d2-BB9E-00C04F795683} - C:\Program Files\Messenger\msmsgs.exe
O9 - Extra 'Tools' menuitem: Windows Messenger - {FB5F1910-F110-11d2-BB9E-00C04F795683} - C:\Program Files\Messenger\msmsgs.exe
O16 - DPF: {10093E98-C073-4C75-8D0E-FB5CD3A71D33} (ZoneUpwords Object) - http://messenger.zone.msn.com/binary/Up ... b57176.cab
O16 - DPF: {17492023-C23A-453E-A040-C7C580BBF700} (Windows Genuine Advantage Validation Tool) - http://go.microsoft.com/fwlink/?linkid=39204
O16 - DPF: {406B5949-7190-4245-91A9-30A17DE16AD0} (Snapfish Activia) - http://www.truprint.co.uk/TruprintActivia.cab
O16 - DPF: {5D6F45B3-9043-443D-A792-115447494D24} (UnoCtrl Class) - http://messenger.zone.msn.com/EN-GB/a-U ... E_UNO1.cab
O16 - DPF: {5F8469B4-B055-49DD-83F7-62B522420ECC} (Facebook Photo Uploader Control) - http://upload.facebook.com/controls/Fac ... loader.cab
O16 - DPF: {B8BE5E93-A60C-4D26-A2DC-220313175592} (MSN Games - Installer) - http://messenger.zone.msn.com/binary/ZI ... b56649.cab
O16 - DPF: {C3F79A2B-B9B4-4A66-B012-3EE46475B072} (MessengerStatsClient Class) - http://messenger.zone.msn.com/binary/Me ... b56907.cab
O17 - HKLM\System\CCS\Services\Tcpip\..\{2CEA2853-736F-4619-8AB6-98AF2DD49418}: NameServer = 212.74.112.66,212.74.112.67
O17 - HKLM\System\CS1\Services\Tcpip\..\{2CEA2853-736F-4619-8AB6-98AF2DD49418}: NameServer = 212.74.112.66,212.74.112.67
O17 - HKLM\System\CS2\Services\Tcpip\..\{2CEA2853-736F-4619-8AB6-98AF2DD49418}: NameServer = 212.74.112.66,212.74.112.67
O18 - Protocol: skype4com - {FFC8B962-9B40-4DFF-9458-1830C7DD7F5D} - C:\PROGRA~1\COMMON~1\Skype\SKYPE4~1.DLL
O23 - Service: Ad-Aware 2007 Service (aawservice) - Lavasoft AB - C:\Program Files\Lavasoft\Ad-Aware 2007\aawservice.exe
O23 - Service: Adobe LM Service - Adobe Systems - C:\Program Files\Common Files\Adobe Systems Shared\Service\Adobelmsvc.exe
O23 - Service: Apache2.2 - Apache Software Foundation - C:\xampp\apache\bin\apache.exe
O23 - Service: avast! iAVS4 Control Service (aswUpdSv) - ALWIL Software - C:\Program Files\Alwil Software\Avast4\aswUpdSv.exe
O23 - Service: avast! Antivirus - ALWIL Software - C:\Program Files\Alwil Software\Avast4\ashServ.exe
O23 - Service: avast! Mail Scanner - ALWIL Software - C:\Program Files\Alwil Software\Avast4\ashMaiSv.exe
O23 - Service: avast! Web Scanner - ALWIL Software - C:\Program Files\Alwil Software\Avast4\ashWebSv.exe
O23 - Service: Google Updater Service (gusvc) - Google - C:\Program Files\Google\Common\Google Updater\GoogleUpdaterService.exe
O23 - Service: InstallDriver Table Manager (IDriverT) - Macrovision Corporation - C:\Program Files\Common Files\InstallShield\Driver\11\Intel 32\IDriverT.exe
O23 - Service: mysql - Unknown owner - C:\xampp\mysql\bin\mysqld-nt.exe
O23 - Service: NVIDIA Display Driver Service (NVSvc) - NVIDIA Corporation - C:\WINDOWS\system32\nvsvc32.exe
O23 - Service: Cyberlink RichVideo Service(CRVS) (RichVideo) - Unknown owner - C:\Program Files\CyberLink\Shared files\RichVideo.exe
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End of file - 6167 bytes