Generally this error occurs because you have deleted your word.exe & excel.exe files to confirm of deletion of these application file you can check by following pathway. If they are not there means you should restore deleted file from Recycle Bin.
"C:\Program Files\Microsoft Office\OFFICE11
If the file are not available in Recycle Bin then you should reinstall M.S. Office Application.
You can restore your system to an earlier date when it was working prpoperly.
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Microsoft Excel is Part of the MS office, and unfortunately it is not free, however Open Office is free and you can do pretty much everything you can do with MS office, for excel they have something called Calc which is a spreadsheet program, it is free and it is good. But if you want MS excel you will have to buy it, downloading a cracked copy is not a good alternative they cause more problems than they solve.good luck
Go to start menu, run, then type 'excel' and hit enter, the installation menu will start but you can just cancel it. To me, the installation will start again and again but I cancel it as Book 1 excel already opens. Then you can double-click any excel file that you want and open it. It worked for me! :)