Moving Folders Causes Error

I have a problem in explorer that whenever I move a folder into another folder, explorer prompts:

Could not find this item

[Try Again] [Cancel]

If I click cancel, nothing will happen, the operation is cancelled.

If I click Try Again, the operation will proceed, the folder will move.

This isn't really a problem, but a HUGE nuisance.

Windows Seven Ultimate 32-Bit.

Edit:

Renaming folders gives errors.

Moving folders into the recycle bin is fine, no errors.

Moving files is fine, no errors.

Renaming files is fine, no errors.

Edit2:

I found an error using registry mechanic:

Highlighted Value Is missing or invalid:

HCKUSoftwareMicrosoftWindowsCurrentVersionExplorerFileExtsDirectory

Please Advise as to what you have here!