Paul, Go to the link below and download the "HTM/HTML Associations" fix. Download the ZIP and open it. Extract the REG file to your hard disk and double click it. Answer yes to the import prompt.
It should correct your problem.
On my new hard disk everything ok, XP Pro 20 Gb IBM, until I try to see something in html. Files with .html extensions open in Notepad by default and in script, without coloured headings and format etc. I noticed it first when I used Belarc Advisor. A search on .html files showed them all to appear in similar fashion. Anyone got ant clues?