As Dan said, repair of XP is a good guess, as it does sound like a currupted process.....

In the mean time, try this;

Open any folder with pics in it (JPEG) and right click a pic and click OPEN WITH. Select INTERNET EXPLORER and tick the ALWAYS USE THIS PROGRAMME bit. When you double click a pic to open it, it will open in a normal IE window now.

I set all mine to do this as picture viewer don't let me access the copy button when you right click

Also, for folders that contain lots of pics, go to VIEW and select THUMBNAILS. Hopefully this will show up all your pics as little thumbnails so at least you get a little preview of what each pic is, before you open it