What happens when, in Windows Explorer, you highlight and double click on a file with extension XLS? Does it Excel start and open the file

If yes, verify that the folder given in your error message actually exists, that the attachment is indeed an XLS file and not one with just extension XLS
If no, then your PC is not configured to associate XLS with EXCEL.EXE: you need to set up this association. In Windows Explorer, click Tools + File Types - what needs to be done should be fairly obvious. If it isn't, contact your IT support people.