There may be a number of reasons why you are seeing this message:
1. You had a virus or Trojan on your computer and removed it with an anti-virus tool, but the Steam executable was damaged.
If you were infected with a virus or Trojan and your Steam installation was damaged, we advise you to uninstall Steam and complete a clean install once you are certain you have removed the infection.
2. Your hard disk had a bad sector and some of the Steam.exe file was lost or damaged.
If you are having problems with your hard disk, we suggest running a 'scandisk' in 'thorough mode', checking for bad sectors and defragmenting your disk once there are no further problems. If you are unable to run scandisk or it fails to complete, there may be a problem with your hard disk; if this is the case, please contact your hard disk or PC manufacturer for further assistance.
3. Your internet connection or Operating System experienced a problem during a Steam update that damaged the Steam.exe file when it was being downloaded to your system. This might include running out of disk space.
In this case, the problem may be resolved by reparing your Steam installation using the Wise installer tool in your Steam directory or from your operating system Control Panel 'add/remove programs' option. When you select Steam, you are given the option to remove or repair the installation. Repair will replace the basic install files that might be damaged, and Steam will then update itself to the current version when you open the program again. If you are out of disk space, we advise you to complete a disk cleanup (use the wizard in your operating system) or uninstall applications that you no longer need. Always be sure to run scandisk and defragment your hard drive after removing applications from your computer to ensure all files are properly removed.
4. You might have a bad download of the SteamInstaller.exe program.
If this is the case, uninstall Steam from the Control Panel 'add/remove' option and reinstall Steam directly from http://store.steampowered.com/about/