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Actually newfolder.exe is a part of a worm spread through KaZaA. It is part of a larger worm entitled "W32.HLLW.Ssdx". It copies itself as: C:\MSDOS.exe, C:\My Documents\Windows.exe, and C:\NewFolder.exe. The Symantec Website describes the worm here, but the removal is easy. It is explained on the site. I would suggest just running a scan from either AVG AntiVirus, Spybot Search and Destroy 1.5, and McAfee Site Advisor (Firefox), or McAfee Site Advisor (Windows).