1)
While that was open I opened a second Windows Explorer, then click on an image which opened in Windows Photo Viewer
In the first Windows explorer located in Users\My Username\AppData\Local\Temp -I could see image files being created and after closing the WPV they vanished
> So the new Variable path I placed to the newly created E:\AppData\Local\Temp -Is not working, or should be placed somewhere else to change the users temp files..?
I think that you have somehow changed environment variables for another user - possibly.
As far as file types association goes the other way is via Control Panel> Default Programs> Associate A File Type then sort by "Current Default" and scroll down to Windows Photo Viewer then change them that way.

My Computer
At a glance
Microsoft Windows 7 Home Premium 64-bit 7601 ...AMD C-60 APU with Radeon(tm) HD Graphics4.00 GBAMD Radeon HD 6290 Graphics
- Computer type
- Laptop
- Computer Manufacturer/Model Number
- ASUS
- OS
- Microsoft Windows 7 Home Premium 64-bit 7601 Multiprocessor Free Service Pack 1
- CPU
- AMD C-60 APU with Radeon(tm) HD Graphics
- Motherboard
- ASUSTeK COMPUTER INC. X501U
- Memory
- 4.00 GB
- Graphics Card(s)
- AMD Radeon HD 6290 Graphics
- Sound Card
- (1) AMD High Definition Audio Device (2) Realtek High Defi
- Screen Resolution
- 1366 x 768 x 32 bits (4294967296 colors) @ 60 Hz
- Hard Drives
- Hitachi HTS545050A7E380 SATA Disk Device
- Antivirus
- Comodo CIS & FW, SecureAplus App Whitelisting, Threatfire
- Browser
- Cyberfox 64bit, Opera 64bit, Airfox
- Other Info
- Spy-The-Spy, HitmanPro.Alert, Norton Connect Safe, MJRegWatcher, BitDefender TrafficLight, Voodoo Shield, Zemana AntiMalware
