You have to delete Windows\System32\notepad.exe which is a self extracting file - virus. You can either:
1) replace this file with the standard Windows/notepad.exe
2) delete any reference to 'System32\notepad.exe' in your registry. When you do that, if you try and open a txt file, windows will ask you to select a program to open it with - just choose Windows\notepad.exe
