Have a look at this
tutorial on how to set the default email client in Windows XP; or
Vista. Though presumably you've tried that approach.
I haven't used The Bat! in years so I don't know how to set it as the default email client from within its own interface, which you must have tried as well.
Searching
The Bat! forums produced this list of threads.
This thread suggests that old standby of reinstalling The Bat! It must pick up all the old folders and settings. Might be worth doing a backup from within TB! before you try this, or at least export-reinstall-import. It's worth a go. Try your luck with some other searches.
Don't know what your requirements are in an email client but TB! is screamingly powerful. It has some amazing suped-up features. I gave it a spin for a while but learning how to drive it was going to need a big investment and I didn't have the stamina. My use of email is fairly pedestrian. For a good few years I've been using
Fastmail.fm, also recommended by CW. It's great in all sorts of ways. Paid members get excellent protection from viruses and spam. My account only receives a tiny trickle of spam every once in a while; maybe that would be different if I released my email address willy nilly, eg posting it on the 'net - horrors!! Also, the FM web interface has been designed to work almost exactly like an email client - it's by far the best webmail interface I have seen. The only reason I use an email client nowadays is to save messages locally. It's a simple solution that will mean you won't have to stick with an ISP to preserve an email address. From memory TB! has very good IMAP support so you could still use it from a Fastmail account. Just a suggestion.