Have you been able to create new folders in the past?
Chris Cosgrove suggested a system restore.
Have you tried a system restore back to a date/time just before the issue started? Disk is not needed for this. All you are doing is reverting your computer back to a different date and time.
As he stated if you need to know how to do it, provide the information Chris requested so we can give you instructions.
Try the system restore first.
If that does not work:
Do you have another user account on your computer? If not create one for testing purposes. After testing you can delete the account if you had to create a new one.
Log on with the test account. Go to My Documents and try to create a new folder.
Post the results.
As for the OS install disk, your computer most likely contains a recovery partition which takes the place of those disks that used to be included in off the shelf systems. If you ever have to reinstall back to factory settings you use the recovery partition if it has not been deleted from your computer.
Edited by Queen-Evie, 24 July 2014 - 06:18 PM.