In the last few days I’ve occasionally received this error because under XP my C:\Documents and Settings\All Users\desktop folder keeps disappearing.
The fix seems simple enough. Just right click and add new folder, then type desktop. Any idea why that folder is going away in the first place though? It is not possible to delete it from Explorer so seems like it would be a glitchy registry, or some corruption, or maybe a virus.
It could be something as simple as something wrong with the group policy or security policy on the machine. you could try restoring both to default.
a virus does also sound likely. AVG, Avast, Malwarebytes and Super Antispyware are your friends. I would also recommend downloading GMER, it’s like hijackthis on steroids and is great for getting rid of root kits.
it could also be data corruption on your hard drive, run a CHKDSK on the drive followed by SpinRite, if they find bad sectors and can’t recover them then low level format and reinstall the OS. buy a new hard drive if that fails. a virus is more likely IMHO.