Types of buttons

Now that the menu works right there is another weird problem. The menu item in question is named Utilities and I have a bunch of shortcuts in the menu. However, there is now a Utilities folder that shows up on the desktop. If I delete that folder the entire contents of the Utilities button disappears. If I restore that folder from the recycle bin the folder again appears on the desktop and the menu entries reappear at the Utilities button.

I guess you've created the virtual folder, that shows the content of "Utilities" folder on the desktop. When you create menu the second field on the first wizard page is optional (Type the path for Virtual Folder). If you want the menu with shortcuts, you can leave this field blank and TLB will create the folder inside the toolbar folder.

How to fix this problem. Delete menu "Utilities" and create new with same name, but leave the VF path field blank. Then drag&drop all shortcuts from desktop folder "Utilities" the the created menu.

The second way: Right-click the "Utlilities" button and select "Open in explorer". Windows Explorer with selected folder "Utilities" will be opened. Go inside the folder "Utilities", delete the file namespace.fld, and copy all shortcuts from the desktop folder. Now refresh TLB (right-click->Refresh). In this case the buttons positions, icons, and other settings must be saved.