Have you tried using command line (DOS)?
Here's a little user guide to working with files and folders (in case you don't know how to).
Go to the Start Menu, Run... and type "cmd". A black window should appear. Type
cd "<folder>"
where <folder> should be the path of the Internet Explorer favorites folder in your computer (for example, in the computer I'm using it's
'C:\Documents and Settings\mlo3721\Favorites'. )
Don't forget to use quote marks " around the folder path so that the spaces in 'Documents and Settings' will be interpreted correctly.
Now type 'dir' and see if you can find the folder you're looking for. If it's there, it should be listed.
If you want to delete the folder, type
rmdir <folder>
where <folder> should be the folder you want to delete with everything in it (use quote marks " around the folder name if it has spaces in its name).
If you want to see inside this folder, type
cd <folder_name>
where <folder_name> is the folder name.
You can move files you have from one folder to another by using the command 'move', like this:
move <file_name_current> <new_folder>
where <file_name_current> is the current directory (if you are not inside the folder the file is in) and file name of the file you want to move and <new_folder> is the path of the folder you are moving the file to.
Let me know if you have any questions.
See ya,
malu