Windows 7 - Cannot delete or Rename Folder or File in use

A painful bug in Windows 7 when you are unable to delete, move or rename a folder or file and received the message " The action can't be completed because the folder or a file in it is open in another program, Close the folder or file and try again".

Steps to Resolve

1. Folder Options

Goto Tools - Folder Options -> View Tab

Uncheck - Always show icons, never thumbnails and also  show preview handlers in preview pane

2. 3rd Party Applications

The other option is to disable a third party application that may be causing the issue

Top Offenders include

Acrobat Reader Tray
Windows Media Player service for av files
Picture Viewer

hope it may help