I'm sorry I don't have the solution, but I have a similar problem.
On my system all the NVIDIA drivers were working and I didn't get any
"delfolders.exe" errors until my motherboard sound drivers went out
and I had to replace the motherboard. The transition seemed to go
rather well with the new motherboard except the NVIDIA drivers were
kicked out and I couldn't reinstall them. I keep getting the "can't
find ...DelFolders.exe" error. I have been intensively searching the
net trying to find a solution. Some people attribute it to Spyware (
http://www.computing.net/windowsxp/wwwboard/forum/78703.html ). Our
common problem with NVIDIA drivers is the first instance that I have
seen that the error is possibly harmful rather than just an annoying
pop-up on start-up.
I have scanned with Norton Anti-Virus to find nothing. There is also
one reference for the problem on a "new computer".
One of the "expert" answers say that "the file Delfolders.exe is not a
viable Windows XP file and C:\WINDOWS\System32\Tools directory isn't a
viable Windows XP directory", meaning they don't really do anything. I
have yet to figure out if this is related to the NVIDIA drivers not
loading and how it is related. If anyone can help out, I would
appreciate it. I shall continue researching the problem independently
and if I get a solution, I shall post it.