Oops, sorry. I should have reported back here sooner. The problem was fixed when I tried a registry fixer at:
http://www.dougknox.com/xp/file_assoc.htm
It wasn't just a problem of file type association. The registry itself had to be fixed somehow. That's all I know. It works fine now and I was able to install calibre.
So, all is well. Yes those were all good suggestions, but this turned out to work and wasn't much problem.
Thanks all.