Possible virus hides files without changing attributes.

Hello,

My main box runs Windows 7. I just noticed that files in my removable drive started disappearing. As I hovered over the main folders I saw a terrifying 'Empty' that was verified as I opened them. The drive however still had the same space allocated, so I tested it on another PC and find that the files are intact.
The strange thing is, when I check in the old PC (a retired winXP laptop)the files are not hidden, but main box can't see them and applications (looking through recently opened files) won't find them. Also strange, I tried using the right click menu : New: Text document on the removable drive, and a popup came up that
no such file existed.

I run Avast (fully updated, checked yesterday), but it didn't find any viruses.

Any help would be appreciated