Found this which worked like a charm:

http://uksbsguy.com/blogs/doverton/archive/2007/03/13/how-to-get-companyweb-windows-sharepoint-services-v2-to-work-with-office-2007.aspx

To get the icons working properly you need to unzip the file here: http://www.it99.org/axl/ct.ashx?id=edab2641-4283-492c-8156-e4ddadfc2ee3&url=http%3a%2f%2fwww.it99.org%2faxl%2fdownload%2fOffice%25202007%2520Icons%2520for%2520SharePoint.zip and copy just the contents of the gif-light folder to 'C:\Program Files\Common Files\Microsoft Shared\web server extensions\60\TEMPLATE\IMAGES'