Fortunately, you can add a New Folder command to Windows XP's context menu. Here's how:
Launch Windows Explorer and select Tools | Folder Options.
In the Folder Options dialog box, select the File Types tab.
In the Registered File Types list, select Folder, and click the Advanced button.
In the Edit File Type dialog box, click the New button.
In the New Action dialog box, type New Folder in the Action text box and CMD.EXE /C MD "%1\New Folder" in the Application Used To Perform Action text box.
Click OK twice and then click Close to close the three dialog boxes.
Now, whenever you want to create a new folder in Windows Explorer, simply right-click on the folder in which you want to create the folder and select the New Folder command from the context menu. Keep in mind that when you do so, you'll momentarily see a Command Prompt window and there will be a slight delay before you actually see the new folder.
To remove the New Folder command, you have to edit the registry. Here's how:
Launch the Registry Editor (Regedit.exe).
Go to HKEY_CLASSES_Root\Folder\Shell key and expand the subtree.
Locate and right-click the New_Foldersubkey and select Delete.
Note: Editing the registry is risky, so be sure you have a verified backup before saving any changes.