Some thoughts:
1. If it's working OK, turn OFF Microsoft Auto Updates, or as a minimum set them to allow you to decide whether or not you need them. I know all about the need to protect your computer from malware, and I know that MS software is primary target for malware, but I prefer to trust my NAT firewall, ZoneAlarm and AntiVirus rather than MS's updates.
MS Updates often break something. There'll be another update out in a couple of months that will fix the broken bit, but you may be desperate by then.
2. Office 2007 is an acquired taste. I know a couple of people who've managed to climb the mountain of the learning curve and like it, and rather more who've given up in disgust and gone and bought Office 2003. One is a successful lawyer who had a very large and very good "will writer" all written round MS Word features.
Word 2007 did away with some of those features, and there is (as far as she could tell) no equivalent replacement. She's back on Office 2003 and very happy.
I'm the bloke who stressed to her to get her new PC with XP Pro, not Vista - and forgot to tell her to ask also for Office 2003.
Auto Updates are OFF on her machine (and on mine).
In your case, if you have the CDs, I'd be inclined to uninstall the whole suite, restart the machine, and reinstall it. Then turn off auto updates.