I recently came across a rather strange display problem when using IE7 on Vista. The favorites bar, instead of displaying favicons and names like "Windows Update" on the favorites bar, now display the .url icon and names like "Windows Update.url". All favorites are displayed with the .url suffix.
It's all the more annoying that I already came across this problem several months ago on the same machine. I had to restore the system disk to a time where it was not solved and it's back ! But I can't remember how I did it. I thought it was just an uninstall of the Google Toolbar, but I did the same thing, and it's still there. I am also pretty sure it is not related to the fact that the shell doesn't hide file extensions when they are known.
A first look on google was not successful.
If you have an idea ...