Open Multimedia Files Player Crashes - PC Rescue

I am having some major issues with multimedia files, namely if I try to play any mpg files on either my WMP or an ATI Multimedia player, my player crashes immediately and I get the standard windows XP error and report it but the windows explorer window also closes with the same type of windows error and reports the problem.

I can only assume this is a result from a "phantom" jpg file I found in a folder this week. The file was "anchored" in a folder in my documents, I say anchored because I was unable to delete/rename/copy/cut/drag and drop/etc. the jpg. Again, I'm only calling it a jpg as it showed a jpg icon although no image was displayed in the preview window and when I selected properties under the file menu, it showed no information, no description, nothing, it even showed 0 kb, although I seem to recall it showed perhaps 82kb when listed in the folder. I was able to finally delete the file by deleting the file folder it was stored in, but it did not undo the damage I mentioned above. Prior to figuring out how to delete the file I ran Adaware, Spybot S&D, Norton, and Ewido and they found nothing out of the ordinary. I also posted an HJT log here and was told it appeared to be clean.

So, when I saw the "debugger" link, I found PCRescue and installed and ran it. Of course I knew it would find lots of errors over 700 but would only delete about 22 in only two registries "windows startup" and "file extensions" Is it worth paying for the full version or is this problem something much more alarming. Lastly, I occassionally see a window informing me DrWatson Debugger needs to be closed, I never installed DrWatson and when I tried to Uninstall it using the control panel, I find no listing there.