All responses here don't work. The issue not that excel isn't found or the association is not working. Can anybody who posted here confirm that there are not spaces in the filenames and paths. In previous version this caused problems since. the syntax use to be excel.exe %1 -> excel my document.xlsx -> these are 2 parameters both going to non existing files so excel will give an error. The fix for this is change the association to excel "%1" in the registry. This will tell excel to treat %1 as a single parameter. For older versions of windows, search for HKEY_CLASSES_ROOT\.xslx. This should point you to an appId, now look for the appid (something like 'ms-excel' or a guid is listed). This will have a cmd node in which the excel.exe %1 is found.
if anyone can tell me how to find this in windows 8.1, just let the world know :)