The solution that worked for me is disabling MSN messenger addin in Internet Explorer. I am not even sure why it was installed in the first place. I am running Win XP SP3 (I see you shake your head), Office 2010 and IE 8 on my machine.
One thing is clear. The solution to this problem is not the same for everyone. The most popular "Answer", provided by Community Star Cody C., is to disable the Skype addin. This locked thread comes up on top of the search results, but is inaccurate:
http://answers.microsoft.com/en-us/office/forum/office_2010-excel/the-clipboard-cannot-be-emptied-in-excel/4b367423-6c7b-4fc7-9203-23c866255d60
I am going to adopt the following signature tag line for the coming week -
--- Contacting the IT support is usually a fruitless endeavor unless you have already found the solution to your own problem.