Under the guise of protecting you from yourself, Windows hides certain files and folders from view to prevent you from accidentally erasing them. For example, AppData folder, which holds the default template for Microsoft Word and a list of sites/passwords for the FTP program Filezilla, is hidden.
Windows 7 also hides the three or four character extensions that appear at the end of all your filenames. If the extensions are hidden and you are looking at a folder of images you may not be able to tell the difference between a JPG and a GIF file or Word 2003 document that anyone can open and a Word 2007 document that requires a newer version of Office.
Remove these training wheels by going into Control Panel, selecting Folder Options, and clicking on the View tab. Select "Show hidden files, folder, and drives". Then uncheck "Hide extensions for known file types" and "Hide protected operating system files". Don't let the warnings spook you; if you're a cautious and responsible PC user, you won't need a nanny.