Why can they see my c:\ directory ?

I have received several e-mails telling me that my computer is vulnerable from internet hackers. The e-mail displays all my top level folders and files at the c:\ level on Win2K. I’d like to know how this is done and what I can do to prevent this. The ad is asking me to buy an internet eraser product. But I’m really concerned/curious about how they can get my computer to return the top level directory info.
Thanks!