Problems Changing the Default Printer
If you have the following problems:
This may be because to the Spooler service is not started, or is crashing due to a corrupt print job. See Cancelling Print Jobs Manually to clear and restart the Spooler.
It may also be caused by a missing registry key. See A user who is logged on to a Windows Server 2003-based Terminal Server cannot configure a printer as the default printer. This article is ostensibly about Terminal Services but the solution applies equally to all Windows systems.