There are a couple of TIDS that point to this issue.
The TID that references Windows 7 says "reported to Engineering"
On trying to delete folders on an NCP Server (does not matter if you are admin or any other user) from a WIn 7 Client you get an error message about needing permission from S-1-1-0 in order to make changes to this folder.
Seems to have been an issue with both XP and WIn 7 at one time but may have been resolved in XP.
S-1-1-0 is the MS SID associated with the group Everyone which prior to XPSP2 included "anonymous" users.
I am assuming that Win 7 follows the behaviour of post XP SP2 in not recognizing "anonymous" users as being members of Everyone thus the error message.

Does anyone have the correct technical explanation for this problem. ?

Renaming the folders allows you to delete them which makes me suspect that renaming alters a SID somewhere.