Invisible Items Visible and Admin Privileges Problem

I am running Mac OS 10.8.2 on a MacBook Pro 2.53 GHz Intel Core 2 Duo.

Somehow all of these invisible folders and files started appearing and I lost all listed items under my favorites. I am not sure how this happened. Is there an easy way to fix this? I am attaching a screen shot.

Three other things I noticed, even though I am the admin for this account, it asks me for a password when I change the name of any folder. And when I try to drag and drop a folder in the same location, it copies it. And lastly, the write protected symbol has appeared in the lower left corner.

Boot from the recovery partition and do a repair permissions in Disk Utility.
Restart and hold down Option (some say command-r but I've never gotten that to work).
Select the Recovery drive.
Run DiskUtility and repair permissions.