>Been a while since I used XP but isn't there a "take no action" option? If you select that and click on OK I think it remembers that in future.
The dialog has a title Apple iPhone. In there, there is a list of program titled "Select the program to launch for this action:". The default is WinZip. Below is a checkbox "Always use this program for this action". That is unchecked.
There is no way to take no action.