I basically got the same, on a work PC where I had never installed any version of Xara before.
What happened was a few options appeared on the right click menu, "Edit with Xara Pro", "Edit with Xara picture editor", (In fact two version of Edit with Xara Pro). However when you double clicked, or chose edit with Xara Picture editor, it opened in Xara Xtreme Pro (and a new version started even if Xara was open).
I was able to fix things by setting always open with to "Paint", and now "edit with Xara Picture Editor works as expected. Haven't tried switching things back yet.
Regards
Lee
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