I can't delete folders from ext drive

I am using the latest update to LION on MBP.

I have tried deleting a folder from an external drive (formatted MS-DOS, FAT32) and I get this error message
"The operation can’t be completed because an unexpected error occurred (error code -1407)."

This is the first time it has happened. I have been using this drive for a few months.

I learnt from a similar post to reboot and, while doing so hold COM/OPT/P/R (PRAM or IRAM or whatever).

The problem persists.

Ah, I am able to delete the contents of the folder, but not the folder.

I have also tried ejecting and reconnecting the drive but to no avail.

Any one got any suggestions?

Cheers, Mal