Question: My system has no .CHM viewing ability. When i launch a .chm file i either get an application error from the program it relates to, or nothing happens. I believe it has something to do with C:\WINDOWS\hh.exe. Any ideas ?

Answer: One of these suggestions might help.

Clear the Temporary Internet Files

1. Close all Internet Explorer windows.
2. Type INETCPL.CPL in Start, Run dialog
3. Click the Delete Files button
4. Select Delete all offline content and click OK
5. Click OK to close the dialog

Clear the contents of the TEMP folder

Type %TEMP% in Start, Run dialog. Select all files in the Temp folder and delete them. Some files in the TEMP folder may be in use. If so, ignore the error and continue deleting the remaining files in that folder.

Register the core modules using these commands

regsvr32 ole32.dll
regsvr32 hhctrl.ocx
regsvr32 itss.dll
regsvr32 msxml3.dll
regsvr32 mshtml.dll /i
regsvr32 jscript.dll
helpctr.exe -regserver

And another step, suggested by Pete Lees [MVP]

You could try deleting the file hh.dat, which should be in this directory:
%userprofile%\Application Data\Microsoft\HTML Help

Hh.dat is a database file that saves such session information as the window position and favorites for the HTML Help viewer. The database file is automatically updated every time the HTML Help Viewer is used. If the database file does not exist, it is re-created. When updating the HTML Help viewer, the information in Hh.dat is not necessarily compatible with the new viewer, which can cause it to become corrupt.

References

PRB: HTML Help Viewer Causes Access Violation

PRB: Hh.exe Causes an Access Violation When Opening .chm Files

Reboot, and then try opening a CHM file to test.
Type in Start, Run: %Windir%\Help\access.chm