I am working on a machine running Windows Server 2008. Every program I have tried to run (firefox, notepad, wordpad) works fine, but if I right-click on any item on the desktop or the start menu and select "Run as Administrator" it freezes.

I can move the mouse around and open/close the start menu, but the items in the start menu do not change color when the mouse hovers over them.

I googled for answers for some time but had no luck. Does anyone have any ideas that I could try?

(Update: I forgot to mention that the machine is virtual and I am using VMWare Workstation. In order to answer the questions below, I have been going to the same snapshot of the system each time. This lets me start the system in the exact same place each time in order to answer your questions and test.)

(Update: When I run any process as administrator and it freezes, I can start task manager, but I cannot see the new process (notepad, etc...) )