New executable verclsid.exe contained in KB908531 hangs on file open/save dialog box

Summary: Since installing KB908531 released Tuesday 4/11/06, five of my users can no longer attach files to email or use Save As within Office (XP 2002 SP3, 2003 SP2) because verclsid.exe opens as a subprocess or thread of the Office application, apparently trying to verify the CLSID of the COM object that (I'm guessing its the icons on Office documents shown within the dialog box) is valid and gets stuck in an apparently endless loop. How do I a) determine which CLSID is trying to be verified and b) fix the problem?  The application hange happens when you try to click on any item in My Documents, or opening My Documents (or whatever your last save location was) when trying to open files from within Office applications. It does not hang when I use Window Explorer to drill down My Documents and open the document I want to work on.

Yes, uninstalling KB908531 is a short-term workaround, however that would leave the users vulnerable to MS06-15, a huge security hole.  I tried regclean already, but that didn't fix it for the five computers I've run into today that have this problem. Reinstalling Windows from scratch resolves this issue as well, but who has the hours to waste for each computer resetup, especially two developers' workstations when nothing else is (apparently) wrong with the OS or the applications on the workstations.
So far I've seen this affect AMD Athlon (via) , Athlon XP (via) , Intel P4 (intel 845, 865) based workstations with office XP 2002 and Office 2003 SP2 are affected. All are running Windows XP SP2, fully Microsoft Updated via WSUS. I'd imagine that since this update is for Windows 98 - 2003 R2, all OS's are potentially affected by this update.
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Yes, also slashdot is all over this problem.

"I googled "verclsid" []. Let me tell you that yesterday, this search string returned no results. This morning, it returned exactly one []. Now, it comes up with 67 web hits and 21 Usenet results [].

Also, because of this "patch", typing "" would return the generic IE "Server Not Found" page. One had to prepend "http://" to the URL. VERCLSID.EXE checks the validity of COM objects, so the damage wasn't confined to Office applications; it affected EXPLORER.EXE and IEXPLORE.EXE.

The workaround was to rename the current version of VERCLSID.EXE and restore the file from the backup created by KB908531 (a System Restore would have sufficed as well). I expect a patch for the patch to be released by Microsoft Real Soon Now. I guess this one was rushed out the door without sufficient testing."

I don't know if restoring just VERCLSID.EXE from the backup equals uninstalling KB908531, or whether it patches more files than VERCLSID. I'd expect an update on the update soon enough.

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