The subject error occurs if:
1. You open Notepad, a Microsoft Office program, or similar program.
2. You invoke the Open or Save As dialog.
3. You open any folder other than My Documents.
4. You right-click a file and press Send To and select either My Documents, a floppy disk drive, or any listed external disk drive.
If the file exists in the My Documents folder, you are prompted to replace the file. You then receive the The Target can not handle this type of document error message.
You can safely ignore this strange behavior, as the file action is correctly performed.