There appears to be an “issue” with some new drivers out this weak (loads) and it is impacting on Windows SP2 (and SP3 for you testers). This either crashes explorer or gives out of memory errors or other errors such as those referencing memory or debug errors at memory location 0x0000.
This also mimmicks an IIS server problem, and DIVX problem as well.
I just had this come in 20 times in a week, and other level 3 techs across the globe (and at MS) got it all wrong.
The issue 9 out of 10 times is what is referred to as a context menu handler problem, and requires a direct or indirect tweak to your registry.
To actually do this in your registry can cause more problems than usual and is hard to undo. Help is at hand for free and cannot cause any long term accidents as there is a free utility that allows you disable your menu handlers one at a time.
The program of course is one of the best programs I have ever used and is again 100% free.
ShellExView
Copyright (c) 2003 – 2005 Nir Sofer
Web Site: http://www.nirsoft.net/utils/shexview.html
CHeck this out and some other free programs there as well.
All you do is run the program, and look for and disable menu handlers (one at a time is best) until you discover the problem.
Easy PC
let me know how you go.
Tech Net TV - 
This solution worked like a charm. In my case it did turn out to be EncodeDivExt that caused it. Weird thig is that I’ve had it installed for a long time, and suddenly it started causing this issue.
No doubt other context handlers could cause it to occur.
I used the same solution above. In my case the culprit turned out to be video thumbnail extractor. I disabled that now no more crashes! Ypiee!! On the flip side it does disable the preview function though.
In my case the problem was with .fla files. I understand that a lot of people are having trouble with .avi format. They could check this out http://www.nirsoft.net/utils/shexview.html
Many thanks for pointing me in the right direction! It was Shellext Class that was the culprit