I have had this exact same problem.
Mouse over the file and resources locked up. Try to rename, delete, cut, copy just result in the "being used" message.
I Tried "Safe Mode" but the same problem exists there too. Had to go into DOS to delete the file as I had too much stuff in the folder to move it all out.
DOS is the only sure way to do it, but if you have NTFS I guess you may just be stuck. (I have seen some command line switches that might work)
I don't know if this is an XP problem but I used to have a similar problem with 98SE with too long file names.
:computer: