Remove Recycler.exe, NewFolder.Exe

These virus can be removed by AVG Free edition. If AVG is not finding or hanging in normal run, perform the scan in safe mode. (Press F8 While booting, select Safe mode).

Another solution is RegRun Reanimator from ( Use it carefully because it suggest many files as suspected).

After the removal by antivirus package, remove the autorun.inf file from your flash drive. [This .inf file hides the Explore and Open lines from the contextmenu.]. You have to use attrib -s -r -h to remove the protection of the .inf file. Otherwise you can use the kill option in RegRun Reanimator.