Jim, An easier solution is to go to the link below and download "XP_Fix.EXE".
"This installaton program will reinstall the missing or corrupt Windows XP system files command.com, autoexec.nt and config.nt. The absence or corruption of one or more of these files causes a "16 Bit Subsystem" error.
We recommend that you download this file and save it to your desktop or to another location where you can find it. Double click on the file to run it once it's downloaded. If problem reoccurs in the future, simply re-run this program".
Below is another link with a similar fix to download & run.
Another fix some have used is to do a search for autoexec.nt You will probably find it in C:\WINDOWS\repair. Copy and paste it into C:\WINDOWS\system32.
Here's a link with Microsoft's description and solution to the problem.
The 2 links below explain what may be causing the problem (Malware).
I am cleaning out a friend's laptop which is a Gateway with Windows XP. I am trying to run WinPatrol and also the CDR drive test on Norton System Works 2005. Both programs open up the error message - when you install or start an MS-DOS or 16-bit Windows based program etc which is found at Microsoft Knowledge Base as Article 324767.
I had no problem with this until I got to the part(Right click the %SYSTEMROOT%\System32 folder, and then click paste.
I can't find this folder on the computer.
Would appreciate some help..............Thanks - Jim