I am able to reproduce this problem using IE 8 with Compatibility Mode turned off. If Compatibility Mode is turned on it works as expected.
So far I have determined that somehow with Compatibility Mode turned off, it causes the postback events to fire 2 times, hence it creates 2 folders when you try to create one. It seems to be related to the use of NeatUpload so I will have to report it to Dean Brettle and see if he can take a look. If I disable NeatUpload the events only fire once as normal and they fire normally on pages that don;t have NeatUpload on them, but there could be similar bugs in other places where we use NeatUpload.
So for now the best workaround is to use Compatibility mode in IE 8 or disable NeatUpload by commenting out the places in Web.config that reference NeatUpload and say "Comment this out in Medium Trust"
Best,
Joe