IE 7 does not display HTM files as html

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I'm using XP MCE, and no I don't have SP3 loaded. And IE7.
When I load (click on it in windows explorer), an HTML or HTM file, it loads in IE7. Okay this is as it should be. But it comes up as the source code, not a web page. If I simply hit the refresh button, it displays now as a web page.
Any ideas?
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