What have you set in Firefox/Tools/Options/Main/system/Defaults?
I can get as far as "Firefox/Tools/Options" but I can't see how to get to "Main/system Defaults". Am I missing something?
Re the OS: yes, you're right WinXP SP2 with all updates except for IE7.
Re my comment about setting IE as the default: I mean Start/Control Panel/Task Bar and Start Bar Menu/Start Menu/Customise - Show on Start Menu –IE Explorer (It had been showing Firefox in the final window after the Firefox upgrade).
Yes, the EXPLORER.EXE file is in the C: \Program Files\Internet Explorer directory. When I double click on it, the same thing happens as happens when I double click on the Shortcut - hour glass for 3 or 4 seconds then nothing.
I right mouse click on the Shortcut in my Task Bar and go to Propertes to view the path.