I'm always amazed by people like you who are eager to aid strangers in need. Thanks. Unfortunately the fix didn't fix the problem. I checked the registry after logging off and on again and the changes in the file were there but it still doesn't work. I don't know if this helps, but when I try to run a .lnk from Total Commander I get the message: "Error executing program! (31)". There are no relevant messages in the event viewer, but apparently some error is returned when trying to run a link.
OK, so here's what I tried. I copied notepad.exe to c:\temp and created a link to it called c:\temp\notepad.lnk. Then I went into VB and created a console application consisting of the command shell("c:\temp\notepad.lnk"). Pressing > (debug run) returned FileNotFoundException. Changing lnk to exe opened a notepad window. What the heck is going on here?