System32.exe is a virus file.
Remove remnants of KWBot.Worm from the Registry and File System
http://www.dougknox.com/xp/scripts_desc/xp_clean_kwbot.htm
Note: You'll have to disable your antivirus program before running the repair.
[Courtesy of MS-MVP Doug Knox]
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Carey Frisch
Microsoft MVP
Windows XP - Shell/User
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| During startup error pop-up 'Windows cannot find
| system32.exe' after searched my C drive I cannot find the
| above mentioned file.
| How can I resolve this issue