Right-click on one of the jpegs and select "Open With." Find a program in the list that you want to open them with, like Photoshop. Or if you don't have Photoshop, just select the Windows Picture Viewer app, whatever it's called in Windows 7. I'm on XP at the moment. Select the option below the list that says, "Always use the selected program to open this kind of file." The click OK, or Open or whatever the button says.
Again, I'm on XP at the moment, but I think Windows 7 is pretty similar. After you do this, all jpegs will open with the program you selected.
I think the answer was to get to the latest Windows 7 version. When my computer was shut down the first night, after it had the .JPEG problem, it had 45 updates from MS. The next day the .JPEGS worked fine.
So the moral seems to be to update your operating system before attacking strange problems.