It's a utility shipped as part of the Windows 98 operating system that allows users to restore long file names. Thus, anyone using the Windows 98 operating system would find this file on their system. If the hoax were received by these users, and believed, many might delete the file thinking their antivirus software had somehow failed to detect the virus. In fact, it wouldn't be the first time signature-based scanners failed to detect a new virus, making the entire hoax even easier to believe. If you aren't confused yet, you should be.
Hoaxes survive simply by causing confusion.
They provide just enough real sounding information to guarantee a pretty high degree of faith. The more believable, the more users willing to pass it along. Worse, this could be a stepping stone to a new trend in hoax writing - targeting necessary system files, warning of dire consequences and instructing users to immediately delete them. In other words, hoaxes may soon be featuring malicious payloads deliberately executed by the gullible and unsuspecting user. Common sense provides the best cure.