Thanks for the reply.
Nope - the Silver Stripe is brand new I only installed 2 weeks ago.
I've attached a couple of screen grabs that might help.... so what happens is this:
1 - Click to create new folder
2 - Little error message appears at the bottom of the screen (see screen grab) - no folder is created in the list
3 - Logout
4 - Log back in
5 - Et voila, there are the new folders in the list (see 2nd screen grab).
It is very bizare.
I've tried in IE and in FF and it does the same thing - running on a live website in a sub domain.
Permissions on the assets folder is the same as yours 755.