Windows Installer and other probloems with Office 2007

I have Office 2007 SP2 installed after upgrading from Office 2003.

It worked fine for a while, then the following started happening:
Everytime I open Word or Outlook, a Windows Installer window keeps popping
up "Preparing to install..." It is highly annoying and time consuming as when
i cancel this, it takes minutes for Word to eventually open up. Then when it
does, as soon as I start typing (same in Excel), an annoying message pops up
every first time about a list of common autocorrections not being available.
Whatever I choose there (to install or not) does not stop thios coming back
continuously.

I have tried the useless diagnostics (no problems found), installed every
possible update, removed unnecessary programs etc and now the following
happens:
My Excel-files (whether .xls or .xlsx) can't be opened from a folders view
as I was used to. I can only get Excel files working now by opening them from
inside Excel (which I don't prefer).

Anybody got any idea short of re-installing everything?