What is the Folder Named: Compressed (zipped) Folder?
In searching your disk you may come across a folder of the name Compressed (zipped) Folder in the C:\Documents and Settings\[Default User]\Send to folder. If you attempt to open the folder you will find you cannot and be puzzled about what it is. Be puzzled no longer.
The "folder" (along with other things in that same directory) is really an Explorer shell command. This particular shell command tells Windows to place one or more files into a compressed folder (actually a ZIP file). It's activated when you highlight one or more files in an Explorer window, right click on it or them, and select Send To followed by Compressed (zipped) Folder.
If you do not have an installed ZIP file handler then Windows XP will treat ZIP files as folders and you can manage them through Windows Explorer. The "folder" described above is the file association that handles this. Should you remove a third-party ZIP handler and the uninstall does not put the Windows association back in place you now know what you have to associate with the ZIP extension in order to make Windows behave.
To restore the native ability of Windows to handle ZIPped files open the File Types dialog (My Computer, Tools, Folder Options, File Types Tab) and scroll down to the .ZIP file extension. Click on the Change button and select Compressed (zipped) Folder from the options.
You should not remove the "folder" as you may need it. It takes up no space on the disk (zero bytes) so just ignore it until or unless you actually need it some day.