Morgan,
When I set that registry value including quotes it does not work either. Anyway, display properties configuration does not use quotes but still uses DOS names. Silly Micro$oft!
By the way, this is the registry key that contains your current screensaver: HKEY_CURRENT_USER\Control Panel\Desktop\SCRNSAVE.EXE
And I also found that you can indeed tweak Windows to disable 8.3 filenames. See screenshot made from <a href="http://www.xteq.com/">Xteq X-setup</a>.
Now if someone who experiences this problem could download X-setup and check the shown setting to test my theory...