Error Executing Programs - Gadgets Not Being Displayed Properly

I decided to disable Avast Antivirus a week a go and start using Microsoft Security Essentials instead. That's when the problems started (which might be just correlation, not causation).

a) When I try to run an .exe file from Total Commander, I get "Error executing program".
b) When I try to run an .exe file from FreeCommander, I get "Your internet security settings prevented one or more files from being opened."

I tried to change all internet settings to "Lowest security" (tried all - intranet, internet...) but problem remained.

c) StartSearch (which I usually use to run applications that don't have icons among the frequently used) doesn't find anything. For example, I type in "Photoshop" and all it finds are blank icons named "Programs" "Documents" "Control Panel" and "Pictures".

I tried fixing the file associations in registry (changing HKEY_CLASSES_ROOTexefileDefault to "%1" %*) but nothing changed. The only way I can run .exe files now is to locate them in Start Menu, locate them using Windows Explorer or via command line.

d) Windows Gadgets stopped being displayed properly.

I have no other clues what might be preventing .exe files from working properly.