Favorites Gone Wrong

Hello everyone - I haven't posted here for a long time.
I'm running Vist Home Basic SP2 + IE8
My Favorites in IE had always been located at c:\user\rose\documents\my documents\favorites.
3 weeks ago I suddenly had a new location - the favorites button in IE was using c:\user\rose\documents\my documents\favorites\my documents\favorites. When I "Add To Favorites" the URLs are placed in the new location.
When I run %userprofile% from Start it shows the original location. In regedit, viewing HKey_Current_User or HKey_Local Machine Shell Foldes and User Shell Folders it shows %userprofile%\favorites. When I run shell:favorites it shows the new location. How can I get IE to use the original location?