How do I set Deluge as default Torrent client?

You don't need to install any additional software to change the default program to open a specific archive type. Just open the file manager Nautilus and right click the file. Open Properties and go to the Open with tab. There you choose the default program.

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The easiest way is to use Ubuntu Tweak. Click on Administration and than on Manage type file. On your left, choose All, find bittorrent file and replace the default program. (not sure if all the names are correct, because I don't use English language by default)