Egh, this is really stupid. It's a bug in Windows. If you create a new folder, type a new name, and immediately click "OK" while the folder name edit box is still up, it returns a path to a folder called "New Folder", rather than the new name you typed in. I played with it a bit, trawled over the docs, and checked Google, but no answers. So I've "fixed" it in the next build - it just re-launches the dialog in that situation. Stupid solution but it's all I can find that works.