There are allot of things that can happen to your XP install when it gets infected with a virus. The most common viruses usually disable the ability to run .exe files to cripple the operating system for the general end user. If you run across this you can copy the below text into a .reg file and run it. This will fix the issues of not being able to run .exe, but will not remove the root cause which is usually a virus.
Windows Registry Editor Version 5.00
[HKEY_CLASSES_ROOT\.exe]
@="exefile"
"Content Type"="application/x-msdownload"
[HKEY_CLASSES_ROOT\.exe\PersistentHandler]
@="{098f2470-bae0-11cd-b579-08002b30bfeb}"
[HKEY_CLASSES_ROOT\exefile]
@="Application"
"EditFlags"=hex:38,07,00,00
"TileInfo"="prop:FileDescription;Company;FileVersion"
"InfoTip"="prop:FileDescription;Company;FileVersion;Create;Size"
[HKEY_CLASSES_ROOT\exefile\DefaultIcon]
@="%1"
[HKEY_CLASSES_ROOT\exefile\shell]
[HKEY_CLASSES_ROOT\exefile\shell\open]
"EditFlags"=hex:00,00,00,00
[HKEY_CLASSES_ROOT\exefile\shell\open\command]
@="\"%1\" %*"
[HKEY_CLASSES_ROOT\exefile\shell\runas]
[HKEY_CLASSES_ROOT\exefile\shell\runas\command]
@="\"%1\" %*"
[HKEY_CLASSES_ROOT\exefile\shellex]
[HKEY_CLASSES_ROOT\exefile\shellex\DropHandler]
@="{86C86720-42A0-1069-A2E8-08002B30309D}"
[HKEY_CLASSES_ROOT\exefile\shellex\PropertySheetHandlers]
[HKEY_CLASSES_ROOT\exefile\shellex\PropertySheetHandlers\PEAnalyser]
@="{09A63660-16F9-11d0-B1DF-004F56001CA7}"
[HKEY_CLASSES_ROOT\exefile\shellex\PropertySheetHandlers\PifProps]
@="{86F19A00-42A0-1069-A2E9-08002B30309D}"
[HKEY_CLASSES_ROOT\exefile\shellex\PropertySheetHandlers\ShimLayer Property Page]
@="{513D916F-2A8E-4F51-AEAB-0CBC76FB1AF8}"