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Error when opening XLSX file with Excel 2003 SP3, file does open but in read only mode with temporary name

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I am using Excel 2003 SP3 and have the Office 2007 compatibility pack installed.  When I open Office 2007 formatted Excel files (XSLX) directly in Windows Explorer, I receive the following error if I do not have Excel already opened:

"Windows cannot find '<path to file>'.  Make sure you typed the name correctly, and then try again.  To search for a file, click the Start button, and then click Search."

Even though I receive the error, the file does open; however, it opens in Read Only mode with a name such as "Xl0000024.xls".  The number seems to increment up each time it happens.

Now here is the strange part.  If I have Excel already open and try to open the file in Windows Explorer, the file opens fine in Modify mode with no error and with the correct file name.

I Googled the error I was getting and found KB211494.  It says I should uncheck the box in Options on the General tab that says "Ignore other applications", but this box is already unchecked in my case.  Any other ideas?  This is really frustrating as a small percentage of our company has upgraded to Office 2007 with the rest still on Office 2003.


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