Windows Error Message Box: 16 Bit MS-DOS Subsystem

I'm using Windows XP Home Edition, Version 2002, SP2. 1.8 GHz, 768 MB RAM.
Everytime I try to open a Windows folder, a windows DOS prompt opens quickly followed by an error message:

16 bit MS-DOS Subsystem
C:\WINDOWS\TEMP\SEARCH~1\Run.exe
The NTVDM CPU has encountered an illegal instruction.
CS:0547 IP:0829 OP:636561 6c 6c Choose 'close' to terminate the application.

after choosing close, the window goes away and the folder I was trying to access opens just fine.

P.S. Any suggestion (for a novice user) on how to get rid of the Fu#king "Neo Toolbar"???

 

I'm getting the same error but mine points not at a temp file, but at a file in Windows\System32.

Have run Adaware, trendmicro's scan, and Symantec Corp edition to no avail.
Now aside from the traditional HULK SMASH PUNY COMPUTER! option, I've got to get this thing fixed (yep this is a work PC doing this).

Thanks.