In the View | Toad Options | File | General | Edit window, once a file type is associated to be opened with Toad, the association type of this file type cannot be changed back to it's original state.
Steps that leads to issue:
1. Select View | Toad Options
2. Select File | General
3. Click Edit and check the box Open with Toad
4. Hit OK, click on Edit again for the same file type and the check box is disabled
Workaround:
Use Windows to change the file type association. Right-click on the file name, select Properties and change the "Open With" application in the General tab. Toad's setting will remain displayed as "Open with Toad", however, Windows association setting overwrites Toad's setting.
Status:
This issue is fixed in Toad for Oracle 9.1.0.62. This version can be downloaded at http://questsupportlink.quest.com/prod_upgrade_alert.asp.