Hi Wannabe1, thanks for your suggestion.
Unfortunately AutoFix did not fix the issue. I was playing with the drive and noticed that if I have any picture files (.jpg or .bmp) on there, the prompt shows up. For all other files (Word, Excel, NotePad), the drive folder appears.
So this gave me an idea and I took another flash drive and removed all picture files from it. And another problem arose. For the second drive, neither a prompt nor a folder opened when there were no pictures, only the system tray icon saying a hardware device is plugged in.
So with a little more playing, I realized that the autoplay prompt only appears if pictures, music, or video files (or any combination of those which is considered "mixed content") are present. And in the autoplay options, those three (pictures, music and video) are the only file types for which options are available.
(According to my two flash drives tested on two computers) Autoplay does not recognize any other file types in flash drives and either opens the drive folder automatically or ignores the thing altogether (so the user has to go through My Computer to reach the drive).
If anyone out there reading this has a flash drive that gets the autorun prompt even if there are no music, picture, or video files on it, please post here about it.