Why can I set VLC as my default browser?
It's probably because VLC supports generic http URLs.  If you want to experiment, proceed with caution.

First, make a backup copy of /Applications/VLC.app/Contents/Info.plist and put it in a safe place.

Then, using a text editor such as emacs or vi (not TextEdit.app !), remove the following lines:

            &lt;dict&gt;
                    &lt;key&gt;CFBundleURLIconFile&lt;/key&gt;
                    &lt;string&gt;generic&lt;/string&gt;
                    &lt;key&gt;CFBundleURLName&lt;/key&gt;
                    &lt;string&gt;http url&lt;/string&gt;
                    &lt;key&gt;CFBundleURLSchemes&lt;/key&gt;
                    &lt;array&gt;
                            &lt;string&gt;http&lt;/string&gt;
                    &lt;/array&gt;
            &lt;/dict&gt;


This should be enough to convince the OS that VLC should not be used as a browser; although I don't know what (if anything) will break in VLC.  You may need to reboot in order to see the effects of the plist change as well.

If things are unstable after that, you can restore the backed up Info.plist file to /Applications/VLC.app/Contents/Info.plist in order to return to the way things used to be.