IE will open to my home page, and surf the net with no problems.
But will not open any .htm or .html files originating from my hard drive. I
get the error message "index.html is not a valid win32 application".

The hard-drive is split into logical drives, NTFS for the system/os and fat
32 for the others (I can't see where that would be an issue).
I had received the navidad (sp?) through an email last week and slowly
noticed odd behavier, removed it ran the usual AVG, Adware but still had
suspicious activity. A few days later while surfing recieved two more
viruses, Trojan horse Downloader.Generic.HGM and Trojan horse
Downloader.Onenet.E.
Each horse created two files, an archive and and an embedded. The two
embedded were caught by AVG and immeditately isolated, later removed. The
archived were removed by CW Shedder. So like I have run Spybot, Adware, AVG,
CWshredder (all in safe mode), Hijackthis repeated times attempting to clean
out the crap....and have uninstalled and re-installed IE........... and still
it will not open htm/html files resident to my system....... Originally after
receiving the navidad virus I did a system roll back thinking IE would start
behaving, but no.

In essence I do not know what the source of the problem is... and only a
basic time frame as when this particular problem started and what I was doing
at the time.
I create web pages so opening my own stuff with out issue, is a thing!
I do have the full version Ace utilities, just haven't run it yet.

If anyone has a good suggestion/direction or insight please respond.
Nora