Windows 7 64 bit issue with IE9 32bit

I'm having an issue on my kids PC. A couple of games call IE9 32bit for them to log into the online multiplayer games. The problem is that something was accidently changed on the IE9 32bit where it now only tries to download webpages instead of opening them, and it asks to "save" the htm as a file. IE9 64 bit works fine. I've done the following to try and fix this issue:

1) I've run both Microsoft Security Essentials and Malwarebytes and the system shows up clean.

2) I've ran inetcpl.cpl and reset IE9 to factory settings.

3) I've gone into Control Panel->Programs and Features->turn windows features on or off,then turned off IE9, rebooted, and reverted to IE8. IE8 32bit does the same download ofwebpages as IE9 32bit.

4) Turned IE9 back on and rebooted. Was able to get to the tools/internet options on initialstartup if IE9 32bit. I deleted cookies, files, offline content. I deleted all temporary files, objects, cleared forms and passwords. I went to the advanced tab and reset to factory defaults. I was thinking that "Working offline" was selected but it wasn't. Rightas I finished the setup for IE9 32bit, it immediately went to downloading a webpage as a file (the webpage is www.msn.com).

5) I've done the Start->All Programs->Accessories->System Tools->Internet Explorer without add-ons, still tries to download the webpage.

6) I uninstalled IE9, reinstalled IE8, still same problem with IE8. Then I reinstalled IE9,same issue.

It was suggested that I look at the registry and do the following:

"If you received this error after uninstalling any application that takes over the HTML open command (including, but not limited to, Chrome & Firefox browsers) you may also need to change the HTM/HTML association in the registry.

Start, click Run, type Regedit in the Open box, and then click OK. Browse to HKEY_CURRENT_USER\Software\Classes\.html Right click the value for the .html key and select Modify… Change the value from “ChromeHTML” to “htmlfile” (or from FireFoxHTML to htmlfile)

Repeat for .htm, shtml, .xht, .xhtml, .xhtm keys Repeat these steps for htm and .shtml keys if they exist. You may also want to check the xhtml and xhtm keys.Odds are something fudged the file extension associations for htm/html files, so it's trying to save them instead of open them.

I think I fix this at least twice a week from people installing Chrome by accident "

When I browse to HKEY_CURRENT_USER\Software\Classes\ there are no .htm, .html, etc.
There is just a .pref and a .WIN32.

Under HKEY_LOCAL_MACHINE\Software\Classes\ all the .htm, html, etc. are set correctly.

I also checked under HKEY_CLASSES_ROOT and everything is set correctly there as well.

What is strange is that it recognizes msn_com.htm as an HTML Document but it prompts me to save this file.