Forcing IE 7 to open links in the current window

We use IE 7 as the default browser. And have set the "Open links from other programs in" to "A new tab in the current window"

However, when other applications try to open a link, it always brings a new IE window, instead of a new TAB in the current window.

It seems like the "Open links from other programs in" setting in IE is not taking effect. Probably a bug???

How can we force IE to open new links in the current window as new tabs?

We have apps that open multiple links at the same time, this causes the desktop to clutter up.

Thanks
Saqib