This is not caused by the exd update problem.
MSFT deliberately inserted a killbit to prevent this because they consider it unsafe and vulnerable to attack.
It's a little more difficult to delete this but if you are confident working in the registry:
Do a search for the GUID of the Web Browser {8856F961-340A-11D0-A96B-00C04FD705A2}
If this key's compatibility flag is set to a value of 1024 this is the kill bit. Change to 0 and see if that helps.
DON'T GO HERE IF YOU DON'T KNOW WHAT YOU ARE DOING!