This issue was traced to the 'Open' verb and a bad file setting. In essence, Windows does not know how to open Excel XML unless the File Type Setting is correct. Below are the instructions for correcting the issue.
- Open the File Settings from any folder by opening an Explorer window and choosing Tools > Folder Options > File Types (tab).
- Navigate to the XML Document type. Click on the 'Advanced' button.
- Highlight the 'open' entry in the Actions box and click Edit.
- The box should have the following settings:
|File Types Settings|
I also have the 'Confirm open after download' option checked on the file type screen, but am not sure if this makes a difference or not.
Following these instructions should get you back to opening Office XML.