[Nate]

With some help we found a hotfix that doesn't look like it addresses the
issue from the description, but it does fix it. You may have to do the
online request or call for the hotfix file.

When applied to a client device and Read Only is selected the server shows
only READ and another user is allowed into edit mode.

http://support.microsoft.com/kb/956795

"Todd Walton" wrote:

I have one person open a Word 2007 document as read-only.

Another person then tries to open this document, but they are not
allowed to edit the document. They get a message saying the file is
in use, and they're options are to:

1) Open the document as read-only.
2) Save a local copy and re-merge later.
3) Be notified when the document is available for editing.

Why can't the second person open the document and edit it?

--
Todd Walton