Note: This solution should be followed only if you are comfortable with installing software and/or modifying installation options and with working with Windows registry.
1. Open Windows Control Panel
2. Open "Add/Remove Programs" (Windows XP) or "Programs and Features" (Windows Vista and 7)
3. Right click on MicroStation's entry and then select "Change"
4. Select "Change" in MicroStation's setup dialog
5. Uninstall the "File Association" feature, click "Ok" at the end of the process
6. Repeat above steps to Reinstall the "File Association" feature.
Note: The steps here below should be only followed by IT specialists and with the approval of your IT department.
If the first method does not restore the file association correctly, a quick way to force Windows to reset file association is to delete the relevant registry keys for MicroStation file types.
1.Open the Windows Registry Editor with Administrator privileges.
In Windows XP: Log in with an Administrator account, type "regedit" in the "Start->Run" menu and hit the "Enter".
In Windows Vista, 7 and 8: type "regedit" in the Windows Search box, this will find "regedit.exe", then right click on it and select "Run As Administrator", regardless of the logged in user account privileges.
2. Expand the HKEY_CLASSES_ROOT
3. Find the ".dgn", ".dgnlib" ".dwg" and ".pzip" registry keys from the HKEY_CLASSES_ROOT root. Export the above keys as backup and then delete them. Close the windows registry editor
4. Right click on any dgn file and select "Open With->Choose Default Program"
5. Select the version of MicroStation you want to associate dgn files to from the "Recommended Programs" list, it should be listed there at this stage (otherwise browse manually to the correct ustation.exe"
The dgn files will now be associated with the correct version of MicroStation.
This may solve also some issues in handling MicroStation packager .pzip files