Hi, I'm trying to create a compressed folder..but i guess a few months back something messed up, i can no longer right click-new-new compressed folder.
Any way i can fix this? i need to make one!!

Windows XP compression tool leaves a lot to be desired as you have now found out.

Get yourself a proper file compression tool like 7Zip which is freeware and contains no spy/adware. Download the 32 bit version...