maybe it is not possible to remove the error message from xls file, as it might have been corrupted. Hope you have backups of the excel file.
if this "The file or directory is corrupted and unreadable" error happens to partition or USB drives, then you can perform chkdsk /f g: (g is the drive letter of the partition) in question to fix the issue easily.'

Hi Joseph,

To troubleshoot or fix your errors, you need to locate and repair the problem file by applying the following steps:

• Find XLStart folder in Windows XP operating system , the default path is C:\Documents and Settings\Username\Application Data\Microsoft\Excel\XLSTART or C:\Program Files\Microsoft Office\Office10\Xlstart
• Select all the files contained by it and move them to another folder.
• Open all the files one by one and after detecting the corrupted file move other files to its original location i.e. XLStart.
• Now open the corrupt file using ‘Open and Repair’ feature to repair it.

If you are unable to repair corrupted Excel file by applying MS Excel built-in file repair function, then try another method to repair and recover your corrupted file.
In this method you have to save your MS Excel file in HTML format. To do this task open excel file and select ‘Save As’ option and after this select ‘Other Formats’ option and Select ‘Web Page’ from the drop down list.
Make sure that complete workbook is selected and after all click ‘Save’. A warning will appear like “loss of formatting in your Excel file is quite possible” Click ‘Yes‘ to verify this warning or ‘Help’ to know more about it.
After the saving process, right click on the file and select ‘Open with>>Microsoft Office Excel’ option and after it go to ‘Save As’ and ‘Excel’ file format from the list. Change the name of file to avoid any uncertainty and click ‘Save’.

If the above method doesn't work out then, you have to trun a check disk for your PC:

Use the check disk commands as follows:
1. Click Start.
2. In search window type 'cmd' and ENTER. Right click and select 'Run as administrator'.
3. Type at the command prompt CHKDSK /P and press ENTER to scan the disk.
4. Then type CHKDSK C: /F /R and press ENTER to repair corrupt sectors, if there are any.



NOTE: The root drive has to be C: and the command may schedule a task at the system startup, if it does, then press Y to schedule a task and restart the computer to perform chkdsk.
Once chkdsk completes, boot to the desktop and then check.

I hope this helps.

Regards,
Lokesh