First, I would make sure that my floppy connectors on the back end of the floppy are plugged in correctly...this sounds exactly like an connector being connected backwards. It would register the floppy but you wouldn't be able to use it or list it as a device ready. So, check your connections on the back of your floppy and the motherboard and make sure they are correct.
Next, I'd go into the BIOS for your system and check to make sure that I didn't have the floppy set to anything weird...like dual floppies drives selected or anything other than 1.44. Make sure you have plug and play OS set to no so that the motherboard will automatically configure your hardware setup and pass it on to the operating system.
After that, if things still are messed and you want to merge the .reg file...here's how to do it...drop FloppyFilter.reg into your C:/Windows/System32 directory. Then go to start, run, and type: regedit /s FloppyFilter.reg
That will take care of your merge