Reinstall Internet Explorer...get 5.5 SP2...it's the best.
Seriously. It's more than likely a screw-up in the registry somewhere having to do with IE. You could also try installing a registry fixer program, you can usually get Fix-It or Norton pretty cheap.
Also, there is a _very_ good chance it is your video card (doesn't make sense, I know...but trust me, video cards & their drivers do crazy stuff that is hard to pin down). To test, change your video drivers to basic PCI VGA (no need to change out the physical card), and remove the Nvidia drivers...see if the problem persists.
Or, you could try editing
HKEY_CURRENT_USER\software\Microsoft\ Windows\CurrentVersion\Explorer and delete anything that says "recent" in the Shell of folder & User Shell of folder trees. Just a suggestion that probably won't work...but it's worth a try...
Reinstalling over windows is another option. It keeps all your stuff, but can sometimes fix crap in the registry...
Above all, give feedback if any of this fixes the problem.
~Matthias