I have Office 2007 and 2003 installed on the same machine, which is not supposed to be a problem. Every once in a while when I start Word 2007, it gives the above message and takes a few minutes to finish and start. I haven’t paid enough attention to notice a pattern but I think this happens after I run Word 2003 then go back to run 2007.
The easiest way to do it successfully is to put the one you use least often into a virtual machine. That way, the two registries are completely separate.
You can also accomplish this by using Sandboxie. Run one of the programs in the sandbox, and the other outside of it. I do this often when I need to install an old version of a piece of software for quick use.
The only thing that I actually need from 2003 is Excel. I could drop Word. When I first installed 2007 I kept it around for reference because it took me so long to get acclimated to The Ribbon.
I remember running into the same problem as the OP, and fixed it with a registry hack suggested elsewhere online.
I don’t have my notes to hand right now, but as I recall it was either the command lines given in the SOLUTION part of this page, or something very similar.
So I would suggest trying that and reporting back – if the above fix doesn’t work I will delve deeper this weekend to find out what did work for me.
It was indeed an annoying problem that never ought to have existed, but the fix was easy.
[That would have been on Windows XP, by the way – I haven’t tried dual-running Word 2003 and 2007 on Windows 7.]