File association is the link that is established between that file type and the program that is used to open it. This ends up being universal on your PC, though. What I mean by this is that the file type, determined by its extension (JPG, PSD, TIFF, and a host of others) have an assignment so that when you open that file, the program needed to open it will automatically be used.
For example, take our beloved JPGs. On my machine here at work, JPGs are set to be opened by Windows Picture and Fax Viewer. I don't have PSE or any other photo editing software on this machine. You can check what program will open a particular file type by right clicking the file, select Properties, and on the General tab it will show you what file type it is and the program that is selected to open that file type. There is a Change button available so if you don't want to use the program currently selected you can click that button and change it. This is the file association. On my work PC, JPGs are associated to Windows Picture and Fax Viewer. On my home PC, JPGs are associated to CS3 so if I directly click a JPG file on my home PC, CS3 is what will open it. I could change that to PSE, Window's Paint, or one of several others. Just keep in mind, though, that once you set that association on one JPG file, ALL JPG files when you click them will be opened by that program. This does not prevent me from using PSE5 to open a JPG file, though. The file association is what happens automatically if I should click a JPG file directly instead of doing File -> Open from a particular program.
One of the problems you run into is when you are installing a new program, they always seem to want to take over everything they are capable of running, regardless of whatever else you may have installed. So for instance, if you have PSE installed and later install ACDSee, ACDSee will want to become the program of choice for all your picture files. You will generally be given the option to accept that change or not, so you will have a choice to make at that point. Sometimes we just click yes to everything when installing, and then later end up wondering what caused things to change when we "didn't do anything" to change it. It just sorta sneaks up on you if you're not careful. But it is easily fixed as noted above.
This is valid for all file types on your computer. So if a program is selected to open a file type it isn't made to open, you will either get something completely unrecognizable, or an invalid file type error.
For example, take our beloved JPGs. On my machine here at work, JPGs are set to be opened by Windows Picture and Fax Viewer. I don't have PSE or any other photo editing software on this machine. You can check what program will open a particular file type by right clicking the file, select Properties, and on the General tab it will show you what file type it is and the program that is selected to open that file type. There is a Change button available so if you don't want to use the program currently selected you can click that button and change it. This is the file association. On my work PC, JPGs are associated to Windows Picture and Fax Viewer. On my home PC, JPGs are associated to CS3 so if I directly click a JPG file on my home PC, CS3 is what will open it. I could change that to PSE, Window's Paint, or one of several others. Just keep in mind, though, that once you set that association on one JPG file, ALL JPG files when you click them will be opened by that program. This does not prevent me from using PSE5 to open a JPG file, though. The file association is what happens automatically if I should click a JPG file directly instead of doing File -> Open from a particular program.
One of the problems you run into is when you are installing a new program, they always seem to want to take over everything they are capable of running, regardless of whatever else you may have installed. So for instance, if you have PSE installed and later install ACDSee, ACDSee will want to become the program of choice for all your picture files. You will generally be given the option to accept that change or not, so you will have a choice to make at that point. Sometimes we just click yes to everything when installing, and then later end up wondering what caused things to change when we "didn't do anything" to change it. It just sorta sneaks up on you if you're not careful. But it is easily fixed as noted above.
This is valid for all file types on your computer. So if a program is selected to open a file type it isn't made to open, you will either get something completely unrecognizable, or an invalid file type error.