The hidden files and folders in Windows Explorer may not be displayed even though you enable the Show hidden files and folders option in the Folder Options. The files and folders can be viewed when using search, or using the DIR /A command from the Command Prompt window.
Also, when you go to open the Folder Options and click the View tab, both the radio buttons Do not show hidden files and folders and Show hidden files and folders may be enabled.
The above symptoms occur if the system is infected by Malware, which modifies the CheckedValue registry value in these branches:
This ploy is used by many Viruses, so that the hidden file (malicious executable or script) won’t be displayed in Explorer. (REF Google Search Results). Also note that some Viruses remove the above option altogether from the View tab of Folder Options applet.
To fix the above setting, download foldersettings.reg and save to Desktop. Right-click on the file and choose Merge. This fix can be applied in Windows XP as well as in Windows Vista systems.