The first error message is because you have Calibre configured to use the default Windows app for azw1, and it appears you have no app configured in Windows for that file extension. Right click on an azw1 file, select Open With, and select Kindle4PC and see if it opens there.
That said, the fact that Calibre didn't change the extension to .mobi or .htmlz seems to indicate that you don't have any Kindle specific tools installed, and the files are still drm encrypted - they probably won't be viewable on anything except the Kindle/Kindle App they were downloaded with. If this is the case try Googling Apprentice Alf.
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