AX Setup: autorun.hta is not a valid win32 application

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When running setup.exe to install Microsoft Dynamics AX 2012 you can run into the following error:

autorun.hta is not a valid win32 application

As seen in the following screenshot.
autorun.hta is not a valid win32 application

In my case, the problem was due to incorrect file associations.

To correct these, go to Control Panel – Programs – Default Programs – Associate a file type or protocol with a program.
Locate the .hta extension and make sure it is associated with the Microsoft (R) HTML Application host application. You can change this by clicking the Change program… button.

The following screenshot shows the correct setup for the .hta extension.
hta file association