How to Fix a Corrupted Recycle Bin in Windows Vista
There are situations where you need to reset the Recycle Bin store folder to fix problems such as Recycle Bin not showing the files that have been deleted, or you’re unable to completely empty the Recycle Bin. Each drive has a hidden and protected folder named $Recycle.bin, which is where the Recycle Bin stores files and folders that you (and other users in the PC) delete. Windows Vista creates a fresh $Recycle.bin folder automatically after you reset it.

Fixing a corrupt Recycle Bin
IMPORTANT: The following procedure permanently deletes all files and folders which are already in the Recycle Bin (from all user accounts in the system) and cannot be recovered.
1. Open an elevated Command Prompt window. To open an elevated Command Prompt, click Start, click All Programs, click Accessories, right-click Command Prompt, and then click Run as administrator.
2. Type the following command and press ENTER:
(This clears out the $Recycle.bin folder from the C:\ partition. You may have to do this for each hard disk partition in your system.)
3. Type exit to close the Command Prompt window.
Editor’s note: The above method fixes Recycle Bin folder corruption, if any. Using the above method as an attempt to fix any cosmetic problems (eg. Recycle Bin showing incorrect icon) with the Recycle Bin does not help.
SEE ALSO
Recycle Bin icon does not refresh automatically
How to restore the Recycle bin icon that has been accidentally deleted
How to hide the "Delete" command from Recycle Bin context menu
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Comment by Susan Palmer on 27 August 2008:
How can you fix a corrupted recycle bin in Windows XP?
Comment by Ramesh Srinivasan on 27 August 2008:
@Susan: Recycle Bin fixes are documented at the following link: http://www.kellys-korner-xp.com/xp_qr.htm. If you want to reset the Recycle Bin store folder (common for all user accounts), use this command from a Command Prompt window, while at the %systemdrive%:
“rd /s /q recycler”
If the partition is FAT32, the folder would be named “Recycled”