Unfortunately, it appears not to work.
Initially, I made the changes and without rebooting tested for the problem (running AVI files) -- the problem was still there. So I figured the changes don't take effect until reboot. After rebooting, I casually checked the Registry, and to my horror, found that 'ati2mag' returned in both places.
It's the monster that won't go away.
So while this attempt at a solution may be onto something, and may work for other events like "Service Control Manager," it doesn't work for this one.
The best solution of all would be to figure out why some people don't have this issue in the first place.