Only "New Folder" in context menu in the Public folder on Windows 7

The Public folder in Windows 7 (C:\Users\Public) can be written to without being an Administrator, but why doesn't the "New" context menu display options such as New Text Document?

The items are missing from the "New" context menu in the C:\Users\Public folder because you do not have the NTFS permissions Write Attributes and Write Extended Attributes to that folder.

If you want the full list of items on the "New" menu, grant these two permissions on the Public folder to your user account or a group of which you're a member, as shown here:

Additional details

You already have permissions to create files and folders in the Public folder as granted via implicit membership in the INTERACTIVE special identity. Per TechNet:

Any user logged on to the local system has the Interactive identity.

By default in Windows 7 the INTERACTIVE special identity is granted permission to create new folders and files in the C:\Users\Public as shown here:

To prove to yourself you indeed have permission to create files in the Public folder, do the following:

1. Open a Command Prompt (not as Administrator)
2. Type CD C:\Users\Public then press Enter
3. Type COPY CON NewFile.txt then press Enter
4. Type Hello world then press F6 followed by Enter
5. Close Command Prompt and browse to the Public folder. Observe the NewFile.txt that you created.