Make sure that everything looks OK in
HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\Shell Folders
There should be a string value named My Pictures set to C:\Documents and Settings\username\My Documents\My Pictures
It is not a locked folder like the recycle bin, which takes other steps to be able to rename, by default you should be able to rename it.
Can you get in it?
Do you need stuff that's in there?
If you answered no to both, delete it, it will be recreated.