It sounds ominous because it's not a message that comes from Windows in my experience. Pick an applicaiton and find its executable file - for example, Internet Explorer is will be iexplore.exe and it lives in C:\Program Files\Internet Explorer - then double click that file. If that doesn't bring up the programme, what message does it show or does it do nothing at all?
If this does affect all programmes, go to http://www.dougknox.com and click on Win XP FIxes then on File Association Fixes and on Exe File Association fix. Download that to a memory stick and transfer it to the affected computer then double click it. It will open a file that puts the system Registry back to normal and it's safe to accept the warning it gives about changing the Registry.
The hardest part of this is to find what caused it so I suggest you go to http://www.malwarebytes.com and download the programme MalwareBytes. Install the trial version, update it then restart into Safe Mode with Networking by tapping Function as soon as your power up the machine. Run the Full Scan and remove any threat it finds by ticking all the boxes. Restart into Normal Mode and if you have concerns, post the MBAM log back here.