It might have something to do with compression being turned on. Right click on the blue folder, go into properties and see if there is an Advanced button (sorry, don't have XP here atm, only have 2K). In there, there might be an option to compress the drive, and it is likely turned on. If you have room, which I imagine you do have, running 3x80g, you can probably just turn it of if it is in fact on.
Either that or it might be the encrypted option in there... have a poke around, I don't think you can do a humungous amount of damage, and you might learn something in the process too (or at least what not to try in the future!)
I'm not certain, but when you turned off compression on the folder, did it ask whether you wanted properties to be inherited or some other such junk like that? You should choose the option for yes, inherit properties, or apply to all subfolders etc.
I've never actually had anything compressed, so I'm just clutching at straws here, but maybe if you recompress the folder and then uncompress and make right decision, you might have some luck? I've gotta go home from uni now, so you're on your own for a while if that doesn't work...
