When left clicking on a Word document, within SharePoint 2007, IE seems to stop responding (it could be loading very slowly, but after about a minute, I try to perform some other action within IE and it's "locked up." To help mitigate this, I have it open a new window, which keeps the original active, but the new window becomes "locked-up."
If I right-click on the document, and select Open, then the document opens within the right application (i.e. winword.exe). All of the settings have been check, file types are associated properly, etc. What seems to be interesting is that MS Word is not included in Default Documents, which is from the Control Panel. The same is true for other users. Wordpad is included, but only for .docx, and the appropriate text files.
In doing a quick Internet search, this has been an issue with others, but it seems there is no definitive solution.
It appears that when left-clicked, IE and SharePoint should just open the document with its default application, instead of trying to open it with IE. What settings could be overlooked to make this occur.