I had the same problem on a win2k3 machine...I could not unset the Read-Only attribute of the properties...microsoft has published a workaround, essentially
attrib -r -s c:path\directorybackground info:
CAUSE
Unlike
the Read-only attribute for a file, the Read-only attribute for a
folder is typically ignored by Windows, Windows components and
accessories, and other programs. For example, you can delete, rename,
and change a folder with the Read-only attribute by using Windows
Explorer. The Read-only and System attributes is only used by Windows
Explorer to determine whether the folder is a special folder, such as a
system folder that has its view customized by Windows (for example, My
Documents, Favorites, Fonts, Downloaded Program Files), or a folder
that you customized by using the
Customize tab of the folder's
Properties
dialog box. As a result, Windows Explorer does not allow you to view or
change the Read-only or System attributes of folders. When a folder has
the Read-Only attribute set it causes Explorer to request the
Desktop.ini of that folder to see if any special folder settings need
to be set. It has been seen where if a network share that has a large
amount of folders set to Read-only, it can cause Explorer to take
longer then what is expected to render the contents of that share while
it waits on the retrieval of the Desktop.ini files. The slower the
network connectivity to the share the longer this process can take to
the point where Explorer may timeout waiting for the data and render
nothing or appear to hang.
Note In some previous versions of Windows, you can change the
Read-only attribute for folders by using the
Properties dialog
box for the folder, but no versions of Windows permit you to change the System
attribute by using Windows Explorer.
WORKAROUND
To work around this issue, use the Attrib command at a
command prompt (Cmd.exe) to view or remove the Read-only or System attributes
of folders. Type
attrib /? at the command prompt to view
the syntax for the Attrib command.
Warning If you remove the Read-only or System attribute from a folder, it
may appear as a ordinary folder and some customizations may be lost. For
example, Windows customizes the Fonts folder and provides a special folder view
that permits you to hide variations, such as bold and italic. It also permits
you to change the folder's view settings in ways that are specific to fonts. If
you remove the Read-only and System attributes of the Fonts folder, these
customized view settings are not available. For folders that you have
customized by using the
Customize tab of the folder's
Properties dialog box, the folder icon and other other
customizations may be lost when you remove the Read-only attribute.
If a program cannot save files to a folder with the Read-only
attribute, such as My Documents, change the Read-only attribute to System by
using the Attrib command at a command prompt.
For example, to change
the Read-only attribute to System for the C:\Test folder, use the following
command:
attrib -r +s c:\test
Note that some programs may not operate correctly with folders
that have the System attribute set. To remove both the Read-only and System
attributes from the C:\Test folder, use the following command:
attrib -r -s c:\test