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I have Windows 7 Ultimate Service Pack 1 with PowerShell 4.0. Under this key

HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\App Paths\PowerShell.exe

I found these values

(Default)  REG_SZ  %SystemRoot%\system32\WindowsPowerShell\v1.0\PowerShell.exe
Path       REG_SZ  %SystemRoot%\system32\WindowsPowerShell\v1.0\

The problem here is the type is REG_SZ instead of REG_EXPAND_SZ, so the %SystemRoot% is never evaluated. I have installed all important Windows updates, but not all optional updates. Is an optional update available to fix this, or does it require manually editing the registry?

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Please install ALL updates and verify the problem still exists. You shouldn't have to modify the registery to fix this. –  Ramhound Jun 25 '14 at 14:28
@Ramhound after installing all optional updates the values are unchanged –  Steven Penny Jun 25 '14 at 15:47

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