First of all, Error 2 is NOT a memory error (as shown in the error explanation in the error indicator). It's the code returned from the command prompt. In this case it's "File not found".
Also, I've had mixed results using the system exec vi. I have a vi that used it to run a batch file for quite some time, then it suddenly started returning Error 2 - although nothing had changed. A thread here suggested changing the input to "command.com \c file.exe"
Check out this thread for more suggestions.
http://exchange.ni.com/servlet/ProcessRequest?RHIVEID=101&RPAGEID=135&HOID=5065000000080000005D400000&UCATEGORY_0=_49_%24_6_&UCATEGORY_S=0&USEARCHCONTEXT_TIER_0=0&USEARCHCONTEXT_TIER_S=0&USEARCHCONTEXT_QUESTION_0=system+exec+error+2&USEARCHCONTEXT_QUESTION_S=0
Tim