At the core of this issue is a simple malconfiguration of the MSI installer that performs the update and configures the registry. It seems that as the installer creates or modifies executeable files and/or registry keys, it does so as the administrator user. This in turn cases all of the permissions on those files/keys to reset to those of the administrator user, causing the error you see.

Specifically, Update KB951944for Office 2007 seems to be the update causing the issue (according to user who have tested each and every patch for the bug). Skipping this one should avoid the problem all together.

There are several possible resolutions to this problem depending on your specific situation, some simple to solve, some more difficult.

The most obvious, and easiest fo resolve, is permissions on the executable files themselves. Firstly you have to open the Office application folder (normally “C:Program files (x86) Microsoft OfficeOffice 12″ or similar). You’ll need to locate each individual application executable (e.g. “Word” is “winword.exe“.) Right click on the executeable and select the “Properties” menu. In the properties window that opens, select the “Security” tab and click “Edit“. Give “Users” full control. You’ll may (in rare cases) need to re-create your shortcuts from these files.

Amongst the registry keys that are affected are the following:

• HKLMSoftwareMicrosoftWindowsCurrentVersionInstallerUserDataS-1-5-18Components379E92CC2CB71D119A12000A9CE1A22A
• HKLMSoftwareMicrosoftWindowsCurrentVersionInstallerUserDataS-1-5-18ComponentsDA42BC89BF25F5BD0AF18C3B9B1A1EE8
• HKLMSoftwareMicrosoftWindowsCurrentVersionInstallerUserDataS-1-5-18ComponentsDA42BC89BF25F5BD0BF18C3B9B1A1EE8
• HKLMSoftwareMicrosoftWindowsCurrentVersionInstallerUserDataS-1-5-18ComponentsDA42BC89BF25F5BD0CF18C3B9B1A1EE8
• HKLMSoftwareMicrosoftWindowsCurrentVersionInstallerUserDataS-1-5-18Components82DE7549CF3F8CCB0DF18C3B9B1A1EE8
• HKLMSoftwareMicrosoftWindowsCurrentVersionInstallerUserDataS-1-5-18Components6F949E36CB3004C50AF18C3B9B1A1EE8
• HKLMSoftwareMicrosoftWindowsCurrentVersionInstallerUserDataS-1-5-18Components6F949E36CB3004C50CF18C3B9B1A1EE8
• HKLMSoftwareMicrosoftWindowsCurrentVersionInstallerUserDataS-1-5-18Components7AA6F3DBF3CE139469FE63D56E7AF446

Any (including any that may not be listed above yet simmilarly afflicted) registry affected in this manner keys need to have thier permissions reset to the same permissions as thier parent key. i.e permissions should be inherited.
If you’re not comfortable doing this by hand, there’s an open-source utility called SetACL (http://setacl.sourceforge.net/) that can help.

WARNING: There are many keys under the “components” key that have nothing to do with Office! do not go and arbitrarily go and reset every single sub-key under “components” to inherited permissions, as this will effectively remove all UAC protection from all installed components (not just office) so don’t do that! You’ll have to inspect individual registry keys.

If you’re in fact going to use SetACL, you can execure the appropriate command-line function like this:

setacl -ot reg -on "HKLMSoftwareMicrosoftWindowsCurrentVersionIn stallerUserDataS-1-5-18Components{GUID}" -actn setprot -op "dacl:np;sacl:nc" -rec yes

Where {GUID} is the ID of the component that requires resetting. It may be easier to copy this command into a batch file if you need to execute it numerous times. Typing this over and over 30 times can be painful.

Well, hopefully one of these solutions has solved the problem fo you. If not, I’ve heard of a later update causing almost the same issue, so you may very well be experiencing a similar problem! Let me know if you do… especially if you figure out another way to solve it.

Thanks to everyone at VistaHeads for following up the problem.

For more information, and to join in discussions on Microsoft products, see the following Microsoft specific Newsgroups:
microsoft.public.office.misc and microsoft.public.word.newusers

One of the more recent updates to Microsoft Office 2007 caused quite some trouble to some users, specifically when running Outlook (or Word etc.) for the first time as a new user on a given machine.

The problem manifests itself by not allowing the user to perform any operations inside the program, or exit the application. In Outlook, this means you can’t open an email, or pretty much anything else. The program won’t even exit. There’s one hint however – if you try and tun a second copy of the program, you get the error message: “A dialog box is open. Close it and try again.“

As it turns out, this is hafll correct. There is in fact a dialogue box open. But it’s not visible to the user. The dialog box is the setup window that asks the user for their name and initials. Unfortunately as fast as the window appearsm it’s hidden again from the user.

It turns out, the problem is related to KB946983 (Outlook 2007 Update), so removing this patch corrects the functionality… It’s important to note though, that update does correct a security vulnerability in Outlook, and you may wish to re-apply the update after you’ve fixed the problem.

The second option to resolve this issue, is to run one of the other Office 2007 programs (e.g. Word), fill in the dialogue box, save the settings, exit both programs (You’ll probably have to end the “Outlook.exe” taks from the task manager), then re-start it all. This usually works, but some users have claimed this did not help, which may or may not be related to the order in which they do these things.

Hope this helps someone.

Ref: http://office-outlook.com/outlook-forum/index.php/m/282796/