USER created folders: size or space RESTRICTION?

Archived from groups: microsoft.public.windowsxp.newusers (More info?)

I ask because I created a folder and entered 22,608 items compromising
1,591.85MB. (1.5 GB mol)

I have an additional 1,165 items compromising 80.79MB which will NOT move or
copy in 'normal windows' or 'safe mode' with "Explorer' or 'ThumbsPlus'.

I then copied the 1,165 to a CD and tried copying to the folder under:
'normal windows', 'safe mode' using; Explorer'/'ThumbsPlus.

ERROR on EVERY attempt: "*The directory or file cannot be created*".

OS: XP Pro FAT32

HD: Maxtor 160GB [6Y160PO]

Partitions: 4 @ 40GB each (38.1/5 actually - I think)

Free Space Availabe on attempted drive: 27.4GB

Defragmentd attempted drive: yes

Ran chkdsk on attempted drive: yes; with no problems reported.

Properties for both folders I attempted to . . move from (which I also
created) report: Read Only [Green-SQUARE] Archive [CHECKED].

I did NOT choose those options when I created the folders and Windows will
NOT allow me to leave all boxes--- unmarked/unchecked.

HOW and WHY has a restriction been imposed on folders I created?