Unable to run .Exe file in Windows server 2003

This is a clear case of windows corruption. You have installed a third party software that is too much corrupted that it damaged the windows file or you have been infected with viruses that destroyed the files in your PC. Here are few things that you should try .

1. Install any latest antivirus and scan the whole computer. Delete any potential threat file from the computer.
2. From the start open Run and type regedit.
3. In the next window look for the key Hkey Classes Root->exefiles->shell->open->command
4. In the right side of the windows,double click to open the default.
5. Delete the current value in it ant type this "%1" %*
6. Save it and close the regedit.
7. Restart your computer and then try to run any exe file. There might be a chance that the entry still get edited due to virus present in the computer and that you agian can't run the .exe file. That is why I said to completely clean your PC.

Michelle Bang, thank you! Your deuction is correct. I try to search other sites but I'm having hard time follow their instructions. Your instructions are very easy to follow. This really helped me! Also, thanks,techvy.