This is kind of late, but still useful from the search results. This Solution works also for any shortcut that you want to add on the Explorer context menu. For adding shortcuts on the Desktop context menu, see my tutorial:
http://www.sevenforums.com/chillout-...le-layers.html.
@pcs3657, you were on the right path to the solution. Here is the final one for any program and its icon‼

Part 1: The layout on the context menu:
❶ Write in a text file the path of your program, e.g., Restorator.exe in this case, including the quotes:
Windows 7: "C:\Program Files\Restorator 2007\Restorator.exe"
Windows 8: "C:\Program Files (x86)\Restorator 2007\Restorator.exe"
Trick: If your path is different, copy it from the Explorer this way:
Windows 7: Click in the address bar in an empty space at the end, CTRL+C and paste it in your file CTRL+V.


Then, add a back-slash and the program's name: \Restorator.exe. Finally, quote the entire address like above.
Windows 8: Shift + Right-click on the program > ‘Copy as path’. Then, paste it in your file. The quotes are already included.
❷ Open the Registry Editor:
Windows 7: Start Menu > write regedit > click on the program “Regedit.exe” above.
Windows 8: Win button + R > write regedit.
❸ Go to the key
[HKEY_CLASSES_ROOT\*\Shell]
❹ Right-click on the “Shell” key
> New
> Key. Name it:
Restorator.
❺ On the right side, right-click on “(Default)”
> Modify...
> Press the space bar once before you write:
Open with Restorator (
or whatever you want to see on your menu).
Note:
The optional space before "Open" is just to separate the string nicely from the too closed icon. Part 2: The icon:
❶ Right-click on the empty space below “(default)”
> New
> String Value. Name it:
Icon.
❷ Then, right-click on “Icon”
> Modify...
> paste your quoted Path and add:
,1 at the end right after the quote, then, press Enter.
Example:
"the path\Restorator.exe
",1
Note: The
comma 1 is the index number of the two icons in the Restorator.exe file, i.e., #0 and #1. You may change it for the
,0 if you prefer that one.
The presentation of the Restorator on the context menu is done. Check it out...
Part 3: The command:
Now let's tell it what to do.
❶ Right-click on the
Restorator key on the left side
> New
> Key. Write:
command.
❷ On the right side, right-click on “(Default)”
> Modify...
> paste your quoted Path and add after the end quote:
one space and
"%1" (including those quotes too), then, press Enter.
Example:
"the path\Restorator.exe
" "%1"
Note: The
%1 is a variable pointing to the file you just Right-clicked on. And it must be quoted too.
Normally, the registry program has copied your new keys-values-data here too
[HKEY_LOCAL_MACHINE\*\Shell]. If it did not, then do it manually.
[HKEY_CLASSES_ROOT\*\Shell\Restorator]
(default) .. REG_SZ .. " Open with Restorator"
; for Windows 7:
Icon ...... REG_SZ ... "C:\Program Files\Restorator 2007\Restorator.exe",1
; for Windows 8:
Icon ...... REG_SZ ... "C:\Program Files (x86)\Restorator 2007\Restorator.exe",1
[HKEY_CLASSES_ROOT\*\Shell\Restorator\command]
; for Windows 7:
(default) .. REG_SZ .. "C:\Program Files\Restorator 2007\Restorator.exe" "%1"
; for Windows 8:
(default) .. REG_SZ .. "C:\Program Files (x86)\Restorator 2007\Restorator.exe" "%1"
To add shortcuts on the Desktop context menu (Windows 7), see my tutorial:
http://www.sevenforums.com/chillout-...le-layers.html.