I generally set up A97 to "run as administrator" in both Vista and
Win7. I also set it to run in WinXP (or older) compatibility
mode.
Office 97 has to run as administrator. This has been the case since
the introduction of Windows 2000, which locked down parts of the
registry and programs folder that Office 97 assumed were writable
for user-level logons, but that are not from Win2000 on.
In other words, anyone running Office 97 as a non-administrator
would have encountered this issue starting with Win2000. That people
haven't encountered this and are puzzled by it in Vista/Win7 is due
to the sad fact that nearly everybody was running as administrator
when they shouldn't have been.
Vista/Win7 force the issue -- you can't run as admin unless you jump
through the hoops.
Whether you like it or not, this is a Good Thing.