Although IE8 can't be uninstalled, you should be able to download and reinstall it from here:
http://www.microsoft.com/windows/Int...r/default.aspx
The first thing I would try would be disabling (I know, its risky, but just for a few moments) your antivirus and software firewall, and try viewing the .png image on wikipedia that I linked to before. This will at the very least rule out a problem caused by your security software.
If that does not resolve the issue, reactivate the software and open IE. Go to Tools > Internet Options > Advanced Tab > Reset. In addition to resetting the options for Internet Explorer, this should also reset all of the registry entries in case something got corrupted. If this doesn't fix the problem, then go ahead and try a reinstall.
As far as associating PNG with a specific application, I am not sure if that would have an effect. The browser knows to display the image internally, and should not be checking what program .png files are associated with. Also, on my computer I have .png associated with another image editing program and it doesn't seem to adversely affect the display of these images in IE.