Sounds like a corruption of the Windows icon cache.

You can try to reset (delete) the iconcache.db file.

See http://www.winhelponline.com/blog/how-to-rebuild-the-icon-cache-in-windows-vista/

You can try to reset the Windows icon cache.

• Open the Task Manager (Shift+Ctrl+ESC)
• In the Process tab, right-click on the Explorer.exe process and select End Process.
• Open the file picker via "File > New Task (Run)" and click the Browse button.
• Type or Paste %USERPROFILE%\AppData\Local in the File name field (AppData is a hidden folder).
• Select the file IconCache.db and use Delete in the right-click context menu to delete the file.
• After the IconCache.db has been deleted, start a new explorer.exe process via "File > New Task" to get the desktop and Taskbar back.

It is possible that the file IconCache.db is a hidden file and in that case you need to enable viewing hidden files. You can verify that you can see the file before doing the above mentioned steps.

See http://kb.mozillazine.org/Show_hidden_files_and_folders

I had cleared everything but the cache. iTunes did the same thing when updating to 10 as well. I had fixed this almost 10 minutes after posting, but I could not get back to my post for whatever reason.

Anyone running into this issue, the above post fixes the issue.