Generally, when you see folders converted to files, it means they were corrupted, and chkdsk, in an attempt to recover as much as possible, converts the folders (and other corrupted files) into files that can be read with Notepad. I don't know of any way to convert them back and your best bet is to use Notepad to try to rebuild your files, or a file recovery program as Troy suggested. But I would not put out much hope for either.
Why did you run chkdsk on the drive in the first place? What do you mean by acting up? Generally, when any drive starts acting up, the first thing you try to do is copy off any files you don't want to lose. Of course that advice is a bit late now.