internet explorer has encountered a problem and needs to close.

Appcompat.txt is an error file generated by the compatibility mode of Windows XP when a program crashes unexpectedly.

Make note of the location of the file and open it in notepad. The contents may give you a clue as to what caused the crash.

Also, you might want to try this, once you find what application is connected with the Appcompat.txt file:

http://support.microsoft.com/default.aspx?scid=kb;en-us;286568&Product=winxp
Using Application Verifier to Troubleshoot Programs in Windows XP

>oh also I cannot get on to the internet at all on the computer that is having the problem so I dont see how web site refrences are gonna help me?

Here's the contents of the article whose link I gave above:

Using Application Verifier to Troubleshoot Programs in Windows XP
View products that this article applies to.
This article was previously published under Q286568
SUMMARY
Application Verifier (AppVerifier) is included in Windows XP to promote stability and reliability. You can use this tool to troubleshoot application issues. This article describes how to use Application Verifier to isolate and troubleshoot a program in Windows XP.
MORE INFORMATION
AppVerifier Modes of Operation
AppVerifier features two modes of operation: debugging and logging. Developers that are familiar with software development and testing use the debugging mode to troubleshoot applications; Developers and network administrators use the logging mode to generate a log of issues encountered by a program. In this log, each issue is paired with a specific remedy.

Regardless of the mode in which it is run, AppVerifier is not an automated test tool. You must exercise all functions of the program that you are testing. AppVerifier will only aid you in pinpointing a problem after it is encountered during the testing process.

AppVerifier and SafeDisk
Many gaming and software companies use SafeDisk to prevent users from getting around copyright violations by preventing the program from running with a debugger attached. This means that if you are testing one of these programs, you may not be able to test it using AppVerifier.


Using AppVerifier
To use AppVerifier:
Click Add to add a program to the list.

When a program is added to the list, AppVerifier is globally enabled for it. This means that whether the program is run from AppVerifier, a short cut, or the command line, the selected AppVerifier tests will be applied.
Select the appropriate tests from the Test settings list.
Start your application and exercise it. AppVerifier does not perform the tests of your binary; it only monitors and reports suspicious activity that it detects while you perform tests.

Note: You do not need to click the Run button to exercise your application. It is only provided as a short cut; You can always run the program as you normally would run it.
After you complete the testing, click View Logs to see the log entries that were generated.
Remove the program from AppVerifier when testing is complete.
AppVerifier Features
AppVerifier offers the following features:
Integration of PageHeap and GFlags: AppVerifier wraps the functionality of PageHeap and GFlags in a simplified user interface (UI). You can enable page-heap checking with a single mouse click.
Error Logging: AppVerifier places debug information into a log file that you can view and manipulate through the AppVerifier UI. This is helpful for non-technical users who do not know how to use a debugger.
Application Compatibility Testing: The tests written by the AppCompat team monitor for the most common application problems, including incorrect version checking, bad registry usage, and hard-coded file paths.
Extensible Test Architecture: Internal development teams can create their own tests by leveraging AppCompat's shim architecture. AppCompat will package approved submissions for distribution.
Expected Application Behavior While Using AppVerifier
The program may run slower than usual, which happens because of test overhead.
The program may not start for any of the following reasons:
The program may fail a test during launch. To work around this issue, try unchecking a few of the tests, and then try to restart the program.
The program may not work with a debugger attached.
The program may crash and you may be prompted to have a debugger attached. Some tests will crash the program if a fault is detected.
Sharing AppVerifier Logs
If you want to share an AppVerifier log with another person, click Export Log in the Verifier Log window. This will create a text file that you can send to other individuals. You can view the exported log file in any program in which you can view a text file, or you can use View External Log to examine the exported log from AppVerifier.
Main AppVerifier UI
The AppVerifier window is made up of the following three parts:
Applications to be verified: This section remains empty until you click Add to add the name of an executable program to be verified.
Test settings: This section also remains empty until you add at least one executable program to the Applications to be verified list. After you add an executable program, the available test settings appear in the Test settings list.
Test setting descriptions: If you would like to see descriptions of the displayed test settings, select one from the Test settings list to view the description in this section. You do not need to check the test setting for the description to be displayed.
AppVerifier Options
In AppVerifier, you can use the four following options:
Clear session log when test settings change: Use this option to tell AppVerifier to automatically clear a session log for the specified executable when a program is added or removed or has one of its test settings changed.
Break in the debugger for each log event: Use this option if you are attaching to a debugger and you want any event that would show up in the log to cause the program to break in a debugger. This option is provided primarily for advanced users who are familiar with the use of a debugger and who want to see exactly where problems are occurring in their code.
Use full page heap (heavy memory usage): Use this option to help find heap-related bugs and corruption anywhere in your executable. For more information about the use of full-page heap, see the explanation of Full-Page Heap in the "Choosing a Method to Investigate Heap Block Corruptions" section of PageHeap notes.
Use the AppVerifier debugger to get crash logs: Use this option to allow AppVerifier to attempt to analyze crashes on its own and dump output into the log rather than requiring a user to launch a debugger. This option is provided for less experienced users who are not familiar with the use of a debugger.
AppVerifier Log
When you run a program using AppVerifier, you can view the output in the AppVerifier Log window. You can also use this window to view logs that have been exported by using Export Log.

The logs are shown in tree form. Each log is made up of expandable items displaying information about the executable's run. This information can be as simple as a notification that the listed executable started and stopped, but it can also include more detailed information about specific Microsoft Windows requirements that are violated by the executable. Expanding an item shows a list of violations that fall under that item's category. Click an item to see more information on resolving the problem in the Possible solutions box.

Important: The log is not a complete list of issues found. Some tests log data, some throw exceptions (which means that they crash the program intentionally), and some change the programs environment and rely on the tester to verify that the program continues to function correctly.
REFERENCES
For additional information, click the following article number to view the article in the Microsoft Knowledge Base:
294895 How to Obtain the Windows Application Compatibility Toolkit

The information in this article applies to:
Microsoft Windows XP Professional
Last Reviewed: 5/6/2003 (1.2)  
Keywords: kbenv kbinfo KB286568

Did you try the repair of Internet Explorer that was detailed by sirbounty's first link to the MSKB?  Here is the data from the article:

How to Reinstall or Repair Internet Explorer and Outlook Express in Windows XP
The information in this article applies to:
Microsoft Internet Explorer version 6 for Windows XP
Microsoft Outlook Express 6.0 for Windows XP

This article was previously published under Q318378
IMPORTANT: This article contains information about modifying the registry. Before you modify the registry, make sure to back it up and make sure that you understand how to restore the registry if a problem occurs. For information about how to back up, restore, and edit the registry, click the following article number to view the article in the Microsoft Knowledge Base:

256986 Description of the Microsoft Windows Registry


SUMMARY
This article describes how to reinstall or repair Internet Explorer 6 and Outlook Express 6 in Windows XP. You must do this if you are having problems with Internet Explorer or Outlook Express because of damaged files or missing registration information.

IMPORTANT: After you use the procedures in this article, you must reinstall any updates to Windows XP again. To reinstall Windows XP updates, visit the following Microsoft Windows Update Web site:

http://windowsupdate.microsoft.com/


MORE INFORMATION
WARNING: If you use Registry Editor incorrectly, you may cause serious problems that may require you to reinstall your operating system. Microsoft cannot guarantee that you can solve problems that result from using Registry Editor incorrectly. Use Registry Editor at your own risk.

To resolve this issue, use either of the following methods while you are logged on as an administrator.
Method 1: Reinstall or Repair Windows XP
To repair or reinstall Internet Explorer and Outlook Express in Windows XP, complete the following procedure while you are logged on as an administrator:
Use the System File Checker tool to scan all of the protected files on your computer:
Click Start, and then click Run.
In the Open box, type sfc /scannow, and then click OK. Note that you may be prompted to insert the Windows XP installation CD-ROM.
Test to determine if the issue is resolved. If the issue is resolved, skip the remaining steps. If the issue is not resolved, continue to the next step.
Complete an in-place upgrade of Windows XP, a repair of Windows XP, or reinstall Windows XP.For additional information about how to complete an in-place upgrade or repair of Windows XP, click the article number below to view the article in the Microsoft Knowledge Base:

315341 How to Perform an In-Place Upgrade (Reinstallation) of Windows XP


Method 2: Edit the Registry and Install Internet Explorer 6
While you are logged on as an administrator, click Start, and then click Run.
In the Open box, type regedit, and then click OK.
Locate the appropriate registry subkey, right-click the IsInstalled (REG_DWORD) value, and then click Modify. To reinstall only the Internet Explorer 6 browser component on Windows XP, use the following registry key:

HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Active Setup\Installed Components\{89820200-ECBD-11cf-8B85-00AA005B4383}

To reinstall only Outlook Express 6 on Windows XP, use the following registry key:

HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Active Setup\Installed Components\{44BBA840-CC51-11CF-AAFA-00AA00B6015C}


Change the value data from 1 to 0, and then click OK.
Quit Registry Editor, and then download and install Internet Explorer 6. For information about how o download and install Internet Explorer 6, visit the following Microsoft Web site:

http://www.microsoft.com/windows/ie/default.asp


By default, Internet Explorer 6 is preinstalled in all versions of Windows XP and cannot be uninstalled. To provide computer manufacturers more flexibility in configuring desktop versions of Windows XP, Microsoft has made it possible for OEMs, administrators, and users to remove user access to Internet Explorer while leaving the Internet Explorer code intact and fully functional to make sure the functionality of programs and operating system functions that rely on it. For example, Windows XP supports an "IEAccess=off" switch in the Unattend.txt file, and Internet Explorer has been added to the Add/Remove Windows Components section of the Add/Remove Programs tool in Control Panel. This does not reinstall Internet Explorer.
Last Reviewed: 10/3/2002
Keywords: kbenv kbhowto kbsetup KB318378

>also, is there a way to retrieve files that make have been deleted?

I'll give you the whole "Crazy list", a list of file recovery programs researched out by our top Expert, CrazyOne:

File Recovery tools

FREE TOOLS

PC INSPECTOR
http://www.pcinspector.de/file_recovery/UK/welcome.htm
File Recovery is a data recovery program that supports the FAT 12/16/32 and NTFS file systems. The current version 3.x replaces the previous version 2.x, which is now over 6 years old.

Restoration
http://bluegyn.free.fr/r/rest2514/
For 9x/NT/2K/XP. Restore deleted files that are no longer in the Recycle Bin!

Tool to check and undelete partition
Works with the following partitions:
- FAT12 FAT16 FAT32
- Linux
- Linux SWAP (version 1 and 2)
- NTFS (Windows NT)
- BeFS (BeOS)
- UFS (BSD)
- Netware
- RaiserFS
http://www.cgsecurity.org//testdisk.html
-------------------------------

NOT FREE

EasyRecovery DataRecovery is a simple, yet powerful tool that recovers data that is lost, inaccessible or deleted. It's the ultimate do-it-yourself solution for nearly all causes of data loss (except physical hardware or system problems) where your hard drive and system are fully functional.
http://www.ontrack.com/easyrecoverydatarecovery/

File Rescue 2.5
http://www.file-rescue.com/

GetDataBack for FAT
GetDataBack will help you retrieve your files if the hard drive's partition table, boot record, FAT, or root directory have been damaged by a virus, formatting, fdisk or power failure. GetDataBack can even recover your data when the drive is no longer recognized by Windows.

GetDataBack for NTFS
Recover your files when the data is no longer accessible due to formatting, fdisk, virus attack, power or software failure. Get everything back even when the drive's partition table, boot record, Master File Table or root directory is lost or corrupt.
Hard Drives
Partitions
Floppy Drives
Drive Images
Zip/Jaz Drives
http://www.runtime.org/

Norton Utilities/SystemWorks
The Norton Protected Recycle Bin helps you recover deleted and overwritten files.
The UnErase wizard helps you retrieve files you've accidentally deleted.
http://www.symantec.com/nu/nu_9x/features.html

For NTFS
http://www.restorer2000.com/r2k.htm

Data Recovery
http://www.dtidata.com/
Fast File Undelete
http://www.dtidata.com/products_ff_undelete.asp

Undelete
http://www.quantumsoft.co.uk/undelete.stm

File Recover 2000
http://www.filerecover.com/

R-Tools
http://www.r-tt.com/

File Restore
If you've deleted your data and you want to get it back, you need FileRestore.
FileRestore is a simple, easy-to-use tool for recovering files that have been lost or deleted from your Windows system. Designed for Windows XP, 2000, NT, Me, and 9x
http://www.winternals.com/products/repairandrecovery/filerestore.asp


DFSee
http://www.dfsee.com/
As a tool to 'UNDELETE' files that have been accidentaly deleted.
This feature is implemented for HPFS and NTFS only.

MRECOVER
http://kristenonline.com/lain/cih/mrecintro.htm

Emergency Undelete
I believe this is free
For Win2000 and NT may work on XP
http://www.c2000.com/software/#win2000

Back2Life
http://www.simtel.net/pub/pd/57588.html

Hard Drive Mechanic
http://www.highergroundsoftware.com/6.html
It's true. Even if you just re-formatted your entire hard drive, you can still get all of your data back because, unlike what most people believe, formatting does NOT erase your files! With Hard Drive Mechanic's Unformat Feature, you can restore all of your valuable data in about 10 minutes!
demo version:
http://www.highergroundsoftware.com/downloads2.htm

Filerecovery for Windows
http://www.lc-tech.com/filerecovery.asp
Filerecovery for Windows® is a safe and affordable do-it-yourself data recovery solution that is designed to recover deleted files from all types of media such as Hard Drives, Floppy Drives, SmartMedia, CompactFlash, Memory Sticks, and other types of removable media.

Undelete
http://www.executive.com/consumer/undelete/undelete.asp
You know how upsetting it is to accidentally delete a file that you need—it takes just a moment to lose hours of work. Undelete file-recovery utility captures ALL deleted files including those that typically bypass the Recycle Bin. You can even recover files you purged from our Recovery Bin. With our Emergency Undelete feature, you can recover files deleted prior to Undelete being installed on your system (provided they have not been written over). Buy Undelete and you'll never again be at the mercy of lost data.

Fast File Recovery
http://savemyfiles.com/fastfile.htm
A definite must for the PC guru! It will allow the user to perform all data recovery tasks associated with disks which are not physically damaged.


File Scavenge
http://www.quetek.com/prod01.htm
File Scavenge is the most comprehensive, award-winning file undelete and data recovery for NTFS volumes on Windows NT, Windows 2000 and Windows XP.

Active UNERASER
http://www.uneraser.com/undelete.htm
Active UNERASER is a compact and powerful undelete utility that can recover deleted files and folders on FAT12, FAT16, FAT32 and NTFS systems. It can even restore files from deleted and re-formatted partitions.


------------------------------------
Or Data Recovery Services

http://www.ontrack.com/datarecovery/
Ontrack offers a full range of data recovery solutions to address your data loss needs. Unlike other data recovery companies, Ontrack provides exclusive and patented solutions that do not require you to send in your media for recovery. In situations where the hardware is functioning normally, our patented Remote Data Recovery service and EasyRecovery software solutions can solve your data loss needs safely and effectively in a matter of hours. If another company claims that there is no alternative to shipping your drive, it's because they don't offer an alternative. For situations in which the hardware is physically failing, our In-Lab services will utilize our Class 100 clean-rooms to retrieve your mission critical data.

or

FLAT RATE DATA RECOVERY PRICING INCLUDES!
http://www.i-t-s.com/datarec/datarec_pricing.htm

or

Total Recall
http://www.recallusa.com/
Our recovery and forensic technology is used by support and call centers as well as data recovery providers world-wide.

ESS Data Recovery
http://www.savemyfiles.com/
ESS Data Recovery, Inc. has been removing barriers in the data recovery and computer forensics market ever since its inception http://www.ontrack.com/easyrecoverydatarecovery/