Most solutions I cam across said to uncheck the "Ignore other applications" setting in excel options but this didn't work in my case.
Today I came across this blog post by JClermont which has resolved my issue.
- First, open any folder in Windows XP.
- Click on the Tools menu, and choose Folder Options.
- From the dialog that pops up, click the File Types tab. You will now be presented with a list of all document types recognized by your computer.
- Scroll down to XLS, select it, and click the Advanced button. Now you'll see several "Actions" registered for Excel worksheets.
- Usually, Open is the default (indicated by being in bold). Select "Open" and click the Edit button.
- The main piece of data in here is the field labeled "Application used to perform action". This should point to your Excel executable, followed by some command-line arguments. Here's how it appears on my PC: "C:\Program Files\Microsoft Office\Office\EXCEL.EXE" /e "%1"
- It is very important to make sure that the %1 is surrounded by quotes. %1 is the variable representing the full path and file name of the document you are opening. If it contains any spaces, and this is not surrounded by quotes you will get a flurry of weird errors.
- "Use DDE" is normally checked. Now, make sure that "DDE Message" is empty. Click OK.
- Click OK back at the Edit File Type dialog. Click Close on the Folder Options dialog.
In my case, the "Application used to perform action" was missing the "%1" parameter.