Don't you love it when the solution is so simple that you almost never think of it? I thought to myself "in the Windows 9x days, I could boot into DOS and delete that file". Windows XP still has Safe Mode, but programs can still start depending where they're entered in the system registry.
Finally, it dawned on me that I could boot the Windows XP recovery CD and use the recovery console to delete the file. Sure enough, it worked. I was able to delete it and the registry entry for it. Now I can use my computer without any problems!