Green granite - thanks for the suggestion. However, I wasn't sure whether an Office XP disk registered to a different computer would cause problems. In addition, I didn't want to risk other programs being disturbed.
However, I finally managed to find a link to download Microsoft Photo Editor, downloaded and unzipped it, then added a shorcut in my 'graphics software' folder. Then set it as the default for .jpg files, leaving Microsoft Office Picture Manager as the default for .gif and .bmp files. Works just fine!
KnC, you should find IE8 much more reliable than IE6 or IE7 and it has many useful features. Gates-hating geeks will tell you that Godzilla or whatever it's called is better, but IE8 suits me just fine.