Simon is right, there is something wrong/corrupted about the Windows installer entry for Office. The only way I've 'solved' this (if you even really consider it an issue to begin with) in the past is by uninstalling, using the Windows Installer Cleanup Utility to remove the offending apps/MSI information from the registry, and reinstall the app.
Don't ask my why Office apps might run fine without this happening or why D7 forces it to happen when starting up. I've seen this happen maybe 3 times for me in the last 2 years, so it's very rare and because of this I've never been able to track down exactly what in D7's startup processes are triggering the Windows installer, but note it's not anything about Office in particular. Last time I noted this behavior it was with HP printer software.