Thanks for taking an interest.
The alternate location "At startup, open all files in" is blank.
If I delete the workbook with the "bad" filename, then Excel opens normally without autoloading the workbook.
I'm using Excel 2003 and Windows XP. I tried un-installing and re-installing Excel, but it made no difference !
Of course, I have a workaround - just rename "extension.xls" as "extension_renamed.xls" and all is well. Incidentally, in experimenting, I managed to get another name - "extension2.xls" - onto Excel's black list.
Very strange.