Error message when you open a Web site by using Basic authentication in Sharepoint Designer error pop up "The folder name is not valid"

When you open a Sharepoint Web site by using Basic authentication in Microsoft Sharepoint designer or Microsoft Expression Web on a computer that is running Windows Vista, you may receive the following error message.

"The folder name is not valid"

Check this http://support.microsoft.com/kb/928692

This KB would definitely help.
If "BasicAuthLevel" is already there then check value and change to "2".

Thanks,
Nilesh

A critical error occurred while processing the incoming email drop folder

I see this error in WFE. Its event Id is 6872.

This error is related to your incoming email settings in Central admin.

Go to Central Administration > Operations > Incoming Email Settings
Unchecked Enable sites on this server to receive e-mail and clicked OK.

Then again go back and enable it.

But make sure of email id before enable Incoming email settings and also
Check that your local SharePoint groups have has permissions to c:\inetpub\mailroot\drop
WSS_ADMIN_WPG should have full control
WSS_WPG should have read, execute and list.