heepster, if Windows ME behaves like 98se, then your "Recent" file is only a list of shortcuts to the real files. You can delete any of them either via Windows Explorer or via Start - Documents. Right click on the name of the offending file and select Delete.
If you are getting errors at startup, it is more likely that the offending program is called via the start menu. Either the menu is Start - Programs - StartUp, or via Start - Run - msconfig - Startup. If it is, then you can prevent it being started, but it will still be there. How you deal with it then depends on what it is and what the error message is.