On my workstation, the Options > Source Control only has "Plug-in Selection" under it in the tree menu so file association through SSMS isn't an option on my install.

I know for a fact this all started when I installed SQL 2008 Express over top of my SSMS 2005 on my workstation. My setup is a 2005 server on a different box and my workstation has always had 2005 SSMS on it for administring the server. Some time ago I installed 2008 Express on this workstation and that's the day my trouble began. So, that leads me to believe that my 2008 SSMS install doesn't offer the "file association" option.

Thanks for posting this because I too have scoured forums only to find the registry tweak you mentioned above. I've also tried just using Windows File Association settings with some fancy suggestions on those same forums but those not only wouldn't open the files, they also generated a new warning pop-up window too.

UPDATE: I just realized I was looking in the wrong area but made the mistake of making a second post to announce it...sheesh, one mistake on top of another...I'll be SO GLAD when we get our office moved at the end of this week (slightly stressed-out here) 😛