|"And yet start>run>iexplore.exe still loads the browser".|
Windows File Protection (WFP) prevents the replacement of critical Windows system files, so renaming the file did not really impact IE's functionality since, it was probably automatically restored from the i386 backup.
Since IE is an integral part of Windows XP, a repair install of XP should help, but it'd recommend you try another browser or run a registry repair before you consider an installation repair.
I for now one very seldomly use IE, I use maxthon and the now free Opera for browsing most of the time, unfortunately Opera has a very annoying refresh bug and it makes posting on forum a little aggravating sometimes.
My sig is on sabbatical.