I've had the same problem for about 1 month. FINALLY I resolved it. But it
was not friendly!

I built a new user account from scratch, (very dangerous)
- created a new userid, but did not logon yet
- made a backup of the "default user" profile, then deleted the original
- then restart and logon to the new user account.

Next I exported that section of the registry - and imported into my "bad"
user account - and presto - it worked.
[HKEY_CURRENT_USER\Software\Microsoft\MM20]

I do not know what in particular in that registry was incorrect, but one of
the symptoms is that the options dialog will not save into the default
temporary files location anymore. I've confirmed security settings were as
open as they can get...