That file is a system file and notoriously hard to install yourself. You need to use the System File Check utility (SFC) to do it:
Run sfc with the /scannow option. It'll take a while, so be patient. When it finishes, even if it reports there was nothing to fix, it really did so reboot.
I suspect the problem is caused by a third party plug in. When you start PSE it searches for all the plug-ins* and can't find the 32 bit system file msvcrt10.dll that the specific plug in needs. Sometimes reinstalling a particular third party plug-in can solve the problem. If you click the "OK" on the error message many times it should eventually go away and you can start using PSE.
There are some further troubleshooting steps you can try in the link below "under step 1".
If you are using 32 bit Win 7 you can download msvcrt10.dll and place it in C\Windows\System 32.
If you are using 64 bit Win 7 you can download msvcrt10.dll and place it in C\Windows\SysWow64.
* In the default plug in folder and the extra one you have specified under Edit\Preferences\Plug-Ins.