Ketel One Scott
You are correct in your assessment that different versions of Office on the same machine "breaks" many things in SharePoint 3 or MOSS 2007.
I just distributed Outlook 2007 to my 150 users and kept them using Office 2003 Professional. This has caused many issues in my company and confused many of our employees. MOSS 2007 has allowed my company to streamline many of our processes. The decision to upgrade one application in Office has caused many of our users to stop using Sharepoint.
Problem 1
IE 7 crashed whenever a user tried to open a document. Microsoft then explains a hotfix needs to be installed.
http://support.microsoft.com/default.aspx/kb/938888
Problem 2
Some machines, but not all still had the problem. I found some work arounds on the net that the owssupp.dll file would need to be renamed in the older Office directory. So because all my clients have Office 2003 and Outlook 2007, only one of the two .dll's can be registered at one time. When I register the 2003 version, 2007 features break, and visa-versa. Irritating...
http://support.microsoft.com/kb/833714
Even still, IE6 or 7 would still crash. I was finally able to repair Outlook 2007 which stopped crashing issues.
Problem 3
In any Document library, the Upload Multiple Files option is no longer avaliable.
Problem 4
When I try to edit a document in a document library using the "Edit with Microsoft <app>". I get the error, "Requires a Windows SharePoint Services-compatible application and Microsoft.. just as amyamy had.
Here is the deal... MICROSOFT IS FORCING US TO USE ONE OFFICE INSTALLATION OR THE OTHER. NOW I'M EXPLAINING TO MANAGEMENT THAT WE NEED TO FORK UP ANOTHER $35,000 TO UPGRADE EVERYONE RIGHT AFTER WE JUST PAID $10,000 TO AQUIRE THE OUTLOOK 2007 UPGRADE...