Hi Vazans I had the same problem- this is what I did that seems to have fixed it:
The right-click menu doesn't work with 64-bit versions of Windows XP, Vista or Windows 7. We do not have any updates that fix this problem. Here's a work around:
1. Right-cick on the Windows desktop, select New and then Shortcut
2. In "Type the location of this item," copy and paste the following without quotes: "%Systemroot%\SysWOW64\explorer.exe /separate"
3. Click Next and in "Type a name for this shortcut:" call it "Windows 32 bit Explorer"
4. Click Finish
5. Now do a search and find where the folder is that is called "Windows 32 bit Explorer"
6. When you find it, right click on it and send a short cut of it to your desk top.
7. Make sure that you are logged in as Administrator
8. Make sure that you have turned off User Account Control
9. Click on the desk top icon that is the shortcut to Windows 32 bit Explorer
10. On the left margin do a search for the folder that contains your MP3 file that you want to convert - it may NOT be in the Admin file but under Users and your name.
11. Right click the folder and go to Properties and make sure that the Folder is NOT "Read Only" under Attributes - i.e. un-click the box if it is checked - all the boxes should be unchecked.
12. Now when you right click on the MP3 file that you want to convert it should work.
I have Vista 64 latest everything and it works for me.
Good luck dude.