restore active desktop

My operating system is windows 2000 professional and having some issues recently.

1. Over the past week I am unable to access my desktop. I use to navigate the web using mozilla firefox but now forced to use explorer. I get the following error message when I try to access my documents or anything else on my desktop:

"Your current security settings prohibit running Active X controls on this page. As a result, the page may not display correctly"

The research I have found has directed me to the security setting within internet options and enabling different Active X features but I still get this error message.

2. I know I need to upgrade my operating system. It looks like my computer can handle an upgrade to windows xp with only the addition of the super VGA (800 x 600) or higher resolution video adapter and monitor.

Any thoughts on making this upgrade after fixing my first problem or should I just bite the bullet and buy a new computer completely?

Thanks for any input.