>May be try a direct call to check if it works?
>

DECLARE INTEGER SHCreateDirectory IN shell32;
>    INTEGER hwnd,;
>    STRING  pszPath

>
>It is possible that MD wraps a call to the SHCreateDirectory, though I would expect more traditional API to be used, like the CreateDirectory in kernel32.

Thanks, Anatoliy. The version in SOS is not the latest and I think the developer used SHCreateDirectory function in his code. Installing SP3 for Windows XP fixed the problem.