The entries on the New menu are set in the registry. If one becomes corrupt it can cause lockups like you describe. To check for these you will need to navigate to
\HKLM\SOFTWARE\Microsoft\Shell\Extensions\NewMenu and inspect the subkeys. Each subkey (menu entry) should contain two values:
- Default - the name of the menu entry, eg, Note
- Enabled - DWord data that tells whether to show (1) or hide (0) the entry.
If any of the subkeys don't have these values defined, you can try deleting the entire subkey. Of course you should create a backup of the registry first in case this doesn't work for you.