Mercurial Mel

This sounds like something I had to deal with this week. While the file association thing is something you can fix (quite easily with a registry edit, I can dig it out for you if it still gives you trouble after running MWB scans, just amounts to a bit of copy and paste and double clicking), it's usually a sign of an "exe hijack" component of some malware, so make sure the nasties are gone first.