We test our applications often using ‘RunAs’ to run Internet Explorer under a different session. I know that SharePoint allows you to ‘Log in as a different user’ but it doesn’t always work that well for us (i.e. you log in repeatedly and it might let you in).
One of my colleagues was trying to edit a document logged into Windows as one user, but running his IE session at a different user. Clicking on the document opened it Word in IE – despite that the Library should try and open documents in their client application. Trying to edit the document he got the message:
‘Edit Document’ requires a Windows SharePoint Services-compatible application and Microsoft Internet Explorer 6.0 or greater.
This is the same message as mentioned in KB833714, but a different cause. When I tried editing the same action but as the user he was logged into Windows as it worked fine.
Andy Burns' Blog 
I have MS Office professional plus 2007 and have this issue. Did repair, registering OWSSUPP.DLL, diagnostic run. Nothing fixed this issue. Any suggestions?
Thanks,
K. Anbarasu
Apparantly 64 bit version of IE does not have full support for Sharepoint Try using 32 bit version of IE instead.
Background – see comments here: http://ddkonline.blogspot.com/2008/08/edit-document-requires-windows.html and here: http://technet.microsoft.com/en-us/library/cc263526.aspx
Try 32 bit version instead, should be available even if 64 bit version is installed C:Program Files (x86)Internet Exploreriexplore.exe
as described here: http://answers.microsoft.com/en-us/ie/forum/ie8-windows_7/i-have-windows-7-64-bit-and-need-to-use-internet/babaa5f8-ff06-4ea2-aef6-a9416d65f981