tools>folder options, uncheck hide extensions for known file types.
sorry about punctuation, eating bread
This has to be one of the worst Windows default settings of all time...
This is one of the very first changes I make on a new install.
To the OP, the instructions given are correct and they are applied in Windows Explorer. Win7 hides these menus by default (also lame) so you may have to dig around for the tools/options setting. I'm in front of a WinXP machine now so I can't remember exactly where they bury the settings menu in Win7 - but it is there.
I'm not a big fan of stoning, but this crime deserves it. Virtually everything Windows does with files is extension-based. I'm guessing that MS wanted to emulate the "Macintosh Experience". But hiding those extensions on a PC is dumb.This has to be one of the worst Windows default settings of all time...