You receive a "File Not Found" error message when you open a file by double-clicking the file name

CAUSE

This behavior can occur if the Open action entry for this file type ends in %1.

If the Open action of the file type is edited and the line is restored before you press OK, a %1 is added to the registry key.

If you intentionally add a %1 to the Open action entry for this file type, a %1 is added to the registry key. If you subsequently delete the %1 from the Open action entry, the registry key remains unchanged and must be manually edited.

Additionally, this issue can occur when you manually change the file association of .xls files, or in some circumstances, when you are running multiple versions of Excel on the same computer.

RESOLUTION

Warning If you use Registry Editor incorrectly, you may cause serious problems that may require you to reinstall your operating system. Microsoft cannot guarantee that you can solve problems that result from using Registry Editor incorrectly. Use Registry Editor at your own risk.
To resolve this issue, follow these steps:

1.	Click Start, and then click Run.
2.	In the Open box, type regedit, and then click OK.
3.	Open the following registry key: HKEY_CLASSES_ROOT\Excel.Sheet.8\shell\Open\command
4.	In the right pane, click (Default).
5.	On the Edit menu, click Modify.
6.	Remove the %1 from the end of the Value data string so that the data string reads as follows: "C:\PROGRAM FILES\MICROSOFT OFFICE\OFFICE\EXCEL.EXE" /e (including the quotation marks)
7.	Click OK, and then close Registry Editor.