Windows cannot access the specified device, path, or file. you may not have the appropriate permissions to access the item.

Breaked my head figuring out the above mentioned issue. It looked silly to me because it was just a normal Win2k3 server. Then why wouldn't it execute the exe's that i copied from another machine.

After browsing through the internet for a while, the below solution worked for me.

SOLUTION:
As i had copied the exe file from another machine, right clicked the exe file, Under General Tab, clicked the "Unblock" button.

seems like a Security Feature in Win2k3 and it says - "The file came from another computer and might be blocked to help protect this computer".

Some people got this problem fixed by:
going to add/remove windows components, then uninstalling the "Internet Explorer Enhanced Security component"

These issues seems to be strange and irritates sometimes, hence thought of sharing. May help someone.