SharePoint v2 Issue - Edit in Microsoft Office Word

Just recently, within our SharePoint (v2) Document Library, multiple

idividuals are reported issues for when they click on the document name drop

down menu and choose "Edit in Microsoft Office Word". Expected behavior is

for the document to open up within MS Word 2003.

Now, MS Word does not open when "Edit in Microsoft Office Word" is chosen.

The work around is to start MS Word (winword.exe) first, then the document

opens as expected. Or, they can simply double-click on the link to the

document, and MS Word opens the document (The only problem with this

double-click method is that is misinforms you that the document is Read-Only

which confuses the heck out of end-users). The same issue is occurring with

MS Excel files. We have documented processes that our users must follow and

this is not allowing them to do so,

I'm sure this has something to do with an MS Security Patch for IE or XP?

Yet I cannot easily find this issue out there anywhere. Thought I'd throw it

out there with hopes you've already come across it.