Couple of possibilities besides ones that have already been noted by BrowserUk and Corion:

• You may be Suffering from Buffering - i.e., you may well be executing the program, but trying to process its output before it actually gets there.
• Is the executable actually where you think it is? I.e., is it actually in 'C:/'?
• Is the output of 'test.exe' going to STDOUT (which would be captured in your array) or STDERR (which would not)?

You can cut through most of this by making definitive tests. E.g., create a CGI executable that tests a known working command (untested but should work):

#!/usr/bin/perl -w
use strict;
# Enable all the warnings
use CGI::Carp qw/fatalsToBrowser warningsToBrowser/;
use CGI qw/:standard/;
# Turn off buffering (possibly unnecessary depending on Perl version,
# but can't hurt)
$|++;

# Get the date
my $date = qx{date /t};

print header, start_html, p($date), end_html;
[download]

Run this from the command line; then, try it via your server and browser. Based on the output, you should be able to easily decide in which direction the problem lies.

-- 
Human history becomes more and more a race between education and catastrophe. -- HG Wells

Most likely, the user your webserver runs programs as does not have the right permissions. Have you looked in your webserver error logs or the Event Log? Does your program work from the command line? Does test.exe output to STDOUT or to STDERR?

system tells you when it returns 0, which has little to do with CGI, so possibly, your program can be run, but it puts its output where you can't catch it?.

The length of an array is usually determined by using scalar @array, and I think short of using a tied array, you can't get the length to be negative. Maybe you used $#array which is commonly referred to as "the index of the last element in @array", which is always one less than the length of the array?

The likelyhood is that the userid under which the webserver runs does not have permission to access that part of the filesystem where the executable resides.