"Hidden Files Check" not working properly

Probably you may be infected by a virus, or maybe you were once, and the registry didn't get properly restored. There are some ways to clear this stuff, I have given them in the order as to fatal is the problem in your case. Try out in the given sequence.

1. This next text is from my own registry. Copy the whole text in notepad which is given below in bold then save the file by any name but change the extension to .reg in the local drive where your Operating System is installed, and then double-click it, it will display a message that "Are you sure you want to add the information stored in the file to the registry". Click yes, and then OK.

The text is as follows:-

Windows Registry Editor Version 5.00

[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Explorer\Advanced\Folder\Hidden]
"Text"="@shell32.dll,-30499"
"Type"="group" "Bitmap"=hex(2):25,00,53,00,79,00,73,00,74,00,65,00,6d,00,52,00,6f,00,6f,00,74,\
00,25,00,5c,00,73,00,79,00,73,00,74,00,65,00,6d,00,33,00,32,00,5c,00,53,00,\
48,00,45,00,4c,00,4c,00,33,00,32,00,2e,00,64,00,6c,00,6c,00,2c,00,34,00,00,\
00
"HelpID"="shell.hlp#51131"

[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Explorer\Advanced\Folder\Hidden\NOHIDDEN]
"RegPath"="Software\\Microsoft\\Windows\\CurrentVersion\\Explorer\\Advanced"
"Text"="@shell32.dll,-30501"
"Type"="radio"
"CheckedValue"=dword:00000002
"ValueName"="Hidden"
"DefaultValue"=dword:00000002
"HKeyRoot"=dword:80000001
"HelpID"="shell.hlp#51104"

[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Explorer\Advanced\Folder\Hidden\SHOWALL]
"RegPath"="Software\\Microsoft\\Windows\\CurrentVersion\\Explorer\\Advanced"
"Text"="@shell32.dll,-30500"
"Type"="radio"
"CheckedValue"=dword:00000001
"ValueName"="Hidden"
"DefaultValue"=dword:00000002
"HKeyRoot"=dword:80000001
"HelpID"="shell.hlp#51105"

2. There is software that I came across while surfing for the same problem, the software's name is Smart Antivirus. You can get it through this link http://technize.com/content/downloads/smart_av.exe . You can visit the site  www.technize.com/2007/05/13/ show-hidden-files-and-folders-not-working/ for more information.

This method should be only taken up when none of the above ones are working.

3. What you have to do is, you should open the registry, but remember to back it up. You can make a restore point in system restore, got to Start >> All Programs >>Accessories >> System Tools >> System Restore and then follow the instructions and create a restore point, or just open the registry and export the whole thing, or export some selected keys.
Start >> Run >> (type) regedit >> (rightclick on the little my computer icon, and export the whole thing.) find this key:

HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\Advanced
Go to the rightside of the window, where the values are. Find the value "Hidden". Rightclick it and modify it to 1.

The only catch in this method is that the hidden files in this case would be permanently showing up unless you again make the value to zero instead of 1.

Remember the threat of a possible virus. I read about one of the so called worm32 that did something like this only.

If you still have any problems regarding the above matter, then you can surely leave a comment.
Please note:- Create a system restore point before doing all this stuff.