I'm not using Sublime Text 2, but I went ahead and tested it for you.
It's not working when opening files in paths with spaces in them.
For example, I open the file "J:\My Dropbox\Workspace\blah.txt", Sublime tries to open a file named "My"
GrumpyDev's launcher works in all cases for what it's worth.
Tested on 20110203 x64/386 portables and installed as well.
Here's the ReplaceNotepad.bat
reg add "HKLM\Software\Microsoft\Windows NT\CurrentVersion\Image File Execution Options\notepad.exe" /v "Debugger" /t REG_SZ /d "\"%~dp0sublime_text.exe\" -z" /f