Bit weird this.
In windows 2000 (terminal server, but I doubt that's the problem). Logged in as administrator.
I had a problem that associated files were being opened in notepad, instead of the associated application. I fixed this (some program had defined HKEY_CLASSES_ROOT\*\shell\Notepad\command=notepad %1)
while troubleshooting this problem, I noticed that all options in "folder options"/"file types" are greyed out. i.e. I can't change or add associations.
any idea what would cause this behaviour?!