Many people out there seem to be having the same IE7 problems when trying to edit a document within a document library via SharePoint.  When you try to edit or open that document in that particular document library IE7 just simply freezes and then crashes.

The following instructions should resolve the existing problem that you have been having with Internet Explorer 7 and SharePoint.
 
1.  Perform a search for “owssupp.dll”. You will find that there will be more than one instance of it on your C: Drive.
 
2.  Make sure that you delete all instances of this file (owssupp.dll), from your hard drive (You will need Administrator Rights)
 
3.  Go to Control Panel > Internet Options > Advanced (Tab) > Reset Internet Explorer settings (Click Reset)
 
4.   Run the Office Diagnostics Tool
 
Start > Programs > Microsoft Office > Microsoft Office Tools > Microsoft Office Diagnostic
 
Run the tool
 
When the tool is finished running, you should be able to open Microsoft Office Documents in SharePoint.
 
There is another way that this problem can be resolved as well.
 
 ***Note: Perform the following if the instructions above fail***
 
Reinstall Office 2003 or fix existing install of Office 2003.  Chances are you are running Office 2007 on top of an old install of Office 2003.