This is something that I was unable to fix for XP. Since 2003 is mostly the same as XP (at least for its File Open dialog, mind you), the issue persists there as well.
This isn't an issue on Vista, Win7, or Server 2008 / 2008 R2. I highly recommend that you upgrade to Windows 7! Server isn't even meant for desktop / "workstation" use; it really is for server use, otherwise it's something of a misnomer.
File associations are based on the file extension. Interesting maybe, but certainly not surprising