Whenever I right click on Open Hosts the HOSTS file is not displayed but C:\Documents and Settings\All Users\Start Menu\Programs\HostsMan then hm.exe CPU usage goes to 100% and I have to use Task manager to terminate the process.

Is it set to open HostsMan Editor or an external editor?

Its set to use External editor Notepad but I'll try HostsMan Editor.

Edit: HostsMan Editor works fine.