I fixed this on my XP pc so maybe this will help someone else. I noticed that when logged in as Administrator the problem didn't occur, but that as another user it did. I also noticed that when the menu opened correctly (when logged in as Admin) there was a menu option for 'Convert to Wav' which came from installing Acoustica MP3 to Wave. That at least got me thinking...
It turned out that I'd logged in as Administrator originally an installed MP3 to Wave...but that didn't register it for other usernames...and somehow that left a glitch that Windows Explorer saw as a problem.
I logged back in as another username...started MP3 to Wave...got the register screen and entered the info. Voila...the right-click menu now works as it should.
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