TheBuzzer,
You could try temporarily placing your Finder plist on the desktop to see if maybe your finders preference file has gone bad. Remember this will reset all the preferences you've set in the Finder app and you will have to reset those if it works. If it doesn't you can move your Finder plist back and it will put everything back how it was. To do this go to:
Macintosh HD > Users > Your User > Library ( It's a Hidden Folder ) > Preferences > Move " com.apple.finder.plist " to the desktop > Restart your computer > Did it fix your problem with the folders not being Hidden? > Delete " com.apple.finder.plist " ( If Yes ) > Put back " com.apple.finder.plist " and restart ( If No ).
** Hint To quickly get to your Users Library folder. ** Whilst in Finder press and hold the ( Option ) key and select ( Go > Library ) from the menu bar.
Hope that helps,
Weston