In the Configure button I've even gone in and removed all default apps so it is blank.
Did you first click the Restore Defaults button before removing the Default Application listed? If not go back and click the Restore Defaults button and make sure its pointing to Mac applications not Windows.
Also in addition to what's already been said in the thread so far, RCDefaultApp is a nice freeware System Preferences pane application that easily allows setting the default application used for various URL schemes, file extensions, file types, MIME types, etc. and is very handy to have. You might want to check it out.