Executable apps can only be run by right clicking and using RUN AS or START.

Do you mean that double clicking the application does not launch it and it used to work okay?

Do you see any kind of message (and what is the message) when you double click an executable application that used to work okay?

Depending on what happens, executable launching issues (the issue of them not launching) is a common symptom of malicious software and this is usually easy to repair, at least enough to get you going so you can then get on with your potential malicious software removal tasks.

Norton does not know everything and no single malware program knows about every kind of malicious software, so you should consider expanding your malware detection and removal horizons a bit.  First, we need to resolve your primary issue so please describe things in a little more detail.

Why did you think that replacing rundll32.exe would be beneficial?  

I am not sure what you mean about RESTORE does not continue to run...  Did you attempt a System Restore, reboot and your system complained about the System Restore process not working?   System Restore is not a time machine, so it is not even on my list of things to do when you have system problems.

If you have Norton, it is also well known that Norton will interfere with System Restore.  It is so common, they even wrote a nice document about what to do about it.  I still would never use SR though.

See if this applies to your situation:

http://service1.symantec.com/support/sharedtech.nsf/pfdocs/2005113009323013

I first noticed the problem a few days ago when I double clicked the Hearts game.  The OPEN WITH menu popped up asking what program I wanted to use to open Hearts with.  When I used the "search the internet" option I was told that Microsoft does not recognize the file extension unknown.  I can still use Hearts etc. if I right click the icon and choose RUN AS or START.

 There was an earlier thread that suggested replacing the rundll32.exe when the user could not get apps to open.  Here is the address: http://social.answers.microsoft.com/Forums/en-US/xprepair/thread/530c59ce-0cbe-4d73-a58c-467e38307fb5

Restore will go through the process of rebooting my computer.  In the past when I have used it the process continues after the reboot for about 10 minutes while the old settings are being restored.  Now after the reboot nothing happens.  I figured if my rundll32.exe file had gotten changed or something else for that matter then SR would fix it.

I had run into a problem with Norton some months ago and they came in remotely and fixed it.  I tried to contact their support using the Norton menu and could not get their support page to open.  I did manage to get to their chat page through their website and could chat but when the tech tried to come in remotely the same problem came up with the OPEN WITH menu asking what program I wanted to use to open the remote process with.  I tried IE as the tech suggested but just another iteration of the OPEN WITH menu came up again.

Okay...  I am not worried about SR right now and we can deal with SR later.

Your issue sounds like broken file associations - XP does not recognize what it is supposed to do with an executable (.exe file).  But obviously you figured it out: Run As...

Go to this WWW site by Doug Knox:

http://www.dougknox.com/

On the left, click the Win XP Fixes, File Association Fixes and read the directions at the top of the page.

Download to your desktop from the link called:

EXE File Association Fix

Save it to your desktop (it is a zip file).

Apply it according to the directions you read before (at the top of the download page), then reboot.

Test your system after a reboot, then I would quickly do this:

Run the following scans for malicious software and then fix any remaining issues:

Download, install, update and do a full scan with these free malware detection programs:

Malwarebytes (MBAM):  http://www.malwarebytes.org/mbam.php

SUPERAntiSpyware: (SAS):  http://www.superantispyware.com/

They can be uninstalled later if desired.

When MBAM and SAS run clean, we can take care of Mr. Norton...

That's good.

I run MBAM and SAS alternating once or twice a week depending on what I have been doing - just for the heck of it.  It never finds anything (SAS finds some cookies).  They are both good, but neither seems to know everything about everything and I understand that.

I quit using Norton a l-o-n-g time ago even though I can get it "free" from my Internet Service Provider - no thanks.  No thanks on free McAfee either.

However, some people just love it.

You may want to just temporarily disable Norton (you don't have to uninstall it), reboot without it running and see how your system behaves then.  It carries a lot of overhead and I would rather my RAM and CPU cycles to other things.  Your system will certainly be more peppy, but that comes with some risk depending on your Internet browsing habits.

Refer to their article about System Restore if you are compelled to use SR with Norton.  They didn't write that stuff for nothing.  If you think you need to use SR, I wish you would explain why and actually fix whatever your issue is some other way - for good. I have never use SR to fix any problem and don't plan on ever using it (except for practice to remind me why I don't like it).

If you choose to uninstall Norton (or McAfee FYI) , you need to do it their way which is not from Add/Remove programs.  They just get goofier all the time, these Norton and McAfee people and have "special" uninstall procedures...

Here is the link to the Norton uninstaller:

http://service1.symantec.com/support/tsgeninfo.nsf/docid/2005033108162039