> The default association should go to pyw.exe, which is likely in 
> your C:\Windows directory.

However, don't browse for pyw.exe. That will create a new progid that doesn't support command-line arguments or a shell drop handler. You should select the Python app from the list that shows a rocket/shuttle being launched on its icon. If it isn't shown or doesn't work properly, try repairing your installation of Python.