This is a common reply to that error:

If you have been finding no help with this problem regarding this error "Microsoft Internet Explorer has encountered a problem and needs to close" you're not alone. I had this on my computer and couldn't find any fix posted relevent to my problem.

Starting up in "Safe mode with Network support" seems to bypass this problem and IE fuctions normally. This leads me to believe that some third party program is causing the problem.

* Here is the workaround i found that worked for me. Go to Control Panel, Internet options. Next, go to Advance Tab.
Uncheck "Enable third party browser extension"
Click OK *

With Windows XP this worked right away for me, but you might have to restart computer. If you have multiple profiles setup on your computer, you will have to do this for each profile.

I also noticed that my home page had been changed to res://nshp.dll/index.html#37049
You can change this through the Control panel, Internet options as well.

I would be interested to know if this homepage change happend to the rest of u as well. Id like to know whats causing this. The last software i loaded on my PC was StopZilla.

Please let me know if this workaround works for any of u.

Also you might want to follow up with this:

please follow owen's Instructions and then post your log in the Spyware, Adware, Viruses and HijackThis Logs section (Not Here).