Try the .reg file in this post:
That will restore Explorer as the program associated with folders. If you still have problems afterwards it's probably something else, although I'm not sure what.
My Start Menu breaks all the time; sometimes it won't even open the top level and (beyond animating the button) ignores clicks on the Start button. It's very frustrating and I haven't been able to work out what causes it. Nobody else I know seems to experience it either... Killing and restarting all instances of Explorer.exe fixes the problem, though, so I think it's just a bug in Explorer in my case.