if that doesn't work;
windows 7 (and vista) now stores the default browser in the user portion of the registry, rather than in file associations. see attached. note that for ie the userchoice variable value is IE followed by a dot then the applicable protocol, in the case shown, ftp, so value is IE.ftp, http value is IE.http, https is IE.https.
i use firefox as my default, the value is 'firefoxURL' for all three.
i also note that in your attached file assoc. list that there is no .htm or .html entries, also where did that window in attachment two come from that has the radio buttons for ie and firefox as default? if it is an older program, it might not set the registry correctly.