Hi, puzzy!
The problem is caused by your install of Move To as a context menu item. Here's a link that describes your situation:
http://windowsxp.mvps.org/movetocontext.htm
Lots of people have installed this context menu with the same reg file yours obviously has. I have experimented with Copy To and Move To context menu commands, and I have discovered a workaround for avoiding this annoying effect. Select, copy, and paste the following lines into Notepad and save the file as Copy2Move2.reg. For "save as type" be sure "all files" is selected or it else will add a .txt at the end and you don't want that.
Windows Registry Editor Version 5.00
[HKEY_CLASSES_ROOT\*\shellex\ContextMenuHandlers\Copy to]
@="{C2FBB630-2971-11D1-A18C-00C04FD75D13}"
[HKEY_CLASSES_ROOT\*\shellex\ContextMenuHandlers\Move to]
@="{C2FBB631-2971-11D1-A18C-00C04FD75D13}"
[HKEY_CLASSES_ROOT\Directory\shellex\ContextMenuHandlers\Copy to]
@="{C2FBB630-2971-11D1-A18C-00C04FD75D13}"
[HKEY_CLASSES_ROOT\Directory\shellex\ContextMenuHandlers\Move to]
@="{C2FBB631-2971-11D1-A18C-00C04FD75D13}"
[HKEY_CLASSES_ROOT\Drive\shellex\ContextMenuHandlers\Copy to]
@="{C2FBB630-2971-11D1-A18C-00C04FD75D13}"
[HKEY_CLASSES_ROOT\Drive\shellex\ContextMenuHandlers\Move to]
@="{C2FBB631-2971-11D1-A18C-00C04FD75D13}"
[HKEY_CLASSES_ROOT\Folder\shellex\ContextMenuHandlers\Copy to]
@="{C2FBB630-2971-11D1-A18C-00C04FD75D13}"
[HKEY_CLASSES_ROOT\Folder\shellex\ContextMenuHandlers\Move to]
@="{C2FBB631-2971-11D1-A18C-00C04FD75D13}"
Now before you merge the above reg file into the registry uninstall whatever program wrote the reg key you quoted (if there was a program). Or else if you tweaked the registry yourself with the Registry Editor, delete the keys you added before. Then add your Copy to and Move to menu items back in with my reg file if you really want them. The AllFilesystemObjects key is not the right place to add these menu items. The problem should disappear. Let me know if it worked.
At any rate it's not a VLC-related bug. I'm a fanatical registry tweaker myself. I quit using those file management tools though as soon as I figured out better ways of moving my files. I just put shortcuts to all my most-used folders in an autohide toolbar docked on the side of my screen. Make it initially by dragging a folder to the edge of the screen and dropping it. Set it to autohide, Toolbars, New Toolbar, etc., etc. Multiple toolbars (on the same bar) are stackable and compactable. Click on an arrow and the contents of a toolbar pop out on a menu just to the side of its label. Lots faster than Copy to and Move to.
Oh well. Have fun. Let me know if it worked.