I figured it out !!!
Was determined to find a solution this morning to this. Spent hours trying different things. First I set all windows services back to their defaults, exactly the way they were before I disabled some of them, I figured its got to be a service I disabled, maybe WebClient or something. But nope doing that made no difference whatsoever either.
So then I figured, let me try creating a new user account to play with. So I created a new user account, logged onto it, and set Firefox as the default browser on it, and opened links in the default browser from my RSS reader to test which browser the system is opening as default. Its opening Firefox, its working. Then I opened the Default Programs panel, and using the bottom option 'Set program access and computer defaults', I went to custom and set IE as the default again. Opened another link in my RSS reader, ok its opening IE, then I set Firefox as the default again, another link from my RSS reader, its opening Firefox again.
To make a long story short, I figured it out. Its the first option in the Default Programs panel, 'Set your default programs', thats causing the problem. Because as soon as I used that option instead to set IE as the default, that was it, locked in, and this entire problem starts again. I successfully switched the default browser back and forth between IE and Firefox a good ten times in a row with no problems using only the bottom option on the Default Programs panel, but as soon as I used the top option instead, its screwed.
I'm positive of this, as I went and created 3 more new user accounts too to test this 3 more times. Using only the bottom option in the Default Programs panel gives me no problems. And each time on all 4 new user accounts, as soon as I use the top option on the Default Programs panel instead, this problem starts again.
This could only mean that the bottom option in the Default Programs panel is setting the default browser in an entirely different way then the top option, and Firefox is not taking back the associations in whatever way the first option sets them. So Firefox needs an update to work with the first option in the Default Programs panel, and so does Opera.
But I figured it out. Yay! So all I have to do now is create a new user account to use as my main one, and do NOT touch the first option in the Default Programs panel.
Hope this makes sense the way I've described it, but I tested it 4 times, I'm positive of this problem.