I'm not certain as too what TerraGen is but since your running XP I think you would need to change the way it runs the program.

To try it right click on the file and click "properties", then click "compatability", there you'll see a check box "Compatability Mode" check it and set to run a different version of Windows and see what happens.

I know this works on some older games I have tried that said they wouldn't run on XP with a similar pop up message, but don't know if this is a fix for your problem but might be worth a try

If not I'm certain someone else will be along with a fix.