I had the same error trying to open some Doc & DocX files from Vista Windows Explorer, and yet the same files opened fine within Word 2007. I checked the programs associated with the various file extensions and found many of the Word files were associated with MS WORD VIEWER. I am guessing that this user's computer initially had MS WORD VIEWER & Office 2007 was later installed. After some experimentation, I deleted MS WORD VIEWER (via control panel), rebooted, launched Word 2007 directly & Word automatically changed all of the file extension associations to Word. All is well again.

Manually changing the file extensions was not sufficient (I suspect the user was accidentally launching Word Viewer sometimes which switched back the associations).

I wonder if the Excel & PowerPoint viewers can cause similar problems . . .