Some of the sub folders on C: drive will not allow access by default (the Deny Permission is set, and should not be changed).
Most of the other folders should by accessible if the access permissions are set correctly.
HOW TO: Take Ownership of a File or Folder in Windows XP (or Vista or Win 7)
Error Message: "Access Is Denied" When You Try to Open NTFS File System Folders
Add encrypted files to the list of possible reasons for Access Denied.
More on default Deny permissions, which I quote, as told to me via a Microsoft programmer.
"this is a known and reported issue. It was resolved as won't fix. Here is the reason behind it. "The junctions are there to only provide appcompat for legacy apps and aren’t meant for a user to traverse through. The junctions have been explicitly set to block read through them by setting Everyone Deny Read. The main reason here is because these are just links to the actual location, so you dont want backup tools and other tools operating on your data twice, once from the original path and once via the junctions. There are scenarios where some of these junctions actually form a loop to support the appcompat for the old namespace in comparison to the new and in those cases allowing read through them is disastrous, for e.g. setup was broken for a week when the file system wasnt honorign the deny read.
Also as far as a user goes, you will never see these as they are system hidden, and you will need to take explicit action to see them by default."
Use the Vista instructions in this to reset to default the security settings.
How do I restore security settings to the default settings?
Solving setup errors by using the SubInACL tool to repair file and registry permissions
