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Unable to add a new user on xp machine

I am attempting to add a new user through users in control panel. When I click to open (or rt cl to open)nothing happens.I went to control panel computer management, local users and groups , and attempt to add a new user there. I get the error message: "An error occurred attempting to create the object picker."
                                    %1 is not a valid win32 application.

What might I do to rectify the situation?
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