Two Program files folders (No, it's not the 32 bit and 64 bit ones)

Not sure how this has happened but recently a second program files folder has popped up in my C drive and some software is refusing to install citing path access errors (file not found etc)

Here's a screenshot of my root C drive folder:
http://img.techpowerup.org/120922/Junk082.jpg

When trying to install SQL server 2008 R2 it fails with some weird access error. I can't install WIn 7 Service pack 1 either it says invalid directory. I think it's a registry problem but I can't see anything wrong with my program files directories...
Here's a shot of HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion http://img.techpowerup.org/120922/Junk084.jpg

The contents of the two folders is different and editable separately, however I can not change the name of one of the folders. The other one I can.

Any ideas?