No Create new folder dialog box appears

I use Windows XP. When I want to save a file to a new folder, I click on the little create new folder button in the file save dialog box. It flickers but nothing happens. When I right click in the white space where the directory tree is displayed and then click on refresh in the little drop down menu, it refreshes the directory tree listing and sure enough, there in the list is a new directory named "new folder". I then right click on that, and click rename as it comes up in the drop down list, and rename the new folder to what I want to name it, then hit enter. It says it can't find that folder. Then the window refreshes and there is the new folder with the name it renamed it to. Any idea what's going on? Thanks