Ever since moving to Vista and Office 2007 and MOSS everyone I know with this same configuration has complained about the constant prompting in Office 2007. Here is the scenario and the fix as detailed by one of our AWSOME Desktop Support Engineers at Catapult, Greg (Awesome-O) Tate:

What’s the difference?

I found a fix for the annoying Vista prompts in SharePoint, and both work well on domain computers connected internally and externally. We are still getting many help desk requests for credential prompts when accessing Office files stored in a SharePoint document library. There are many blog posts on this topic, but the root of the problem boils down to an improvement in the security design in the way Vista uses its newly-revamped WebDAV protocol (which is a set of extensions to HTTP that allows you to work with files on a server through the Internet). See references below for more information.

To create the problem

1. While logged in to a Windows 6 system (Vista or Server 2008), store an Office document in a document library.
2. Attempt to open this document from SharePoint.
3. You should receive a prompt to enter your credentials.

I was able to test this situation by creating a new blank Excel file and storing it to my document library on my personal site. I tested with RMS and without RMS and both cases gave me a prompt. I also restricted management permissions in SharePoint as well as defaulted back to the normal inheritance values and received the prompts in both cases.

To remedy the problem:

Force Windows to forward user authentication to a specific list of servers. Open regedit. Navigate to the following subkey:

HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\WebClient\Parameters

Create a new Multi-String value called AuthForwardServerList and give it a value of http://*.yourcompany.com/.

Then restart the WebClient service.

Here is an example batch file:

@echo off
reg add HKLM\SYSTEM\CurrentControlSet\Services\WebClient\Parameters /v AuthForwardServerList /t REG_MULTI_SZ /d http://*.company.com"\0"https://*.company.com /f

net stop webclient

net start webclient

References:

Vista registry fix: http://www.nilsskog.com/Lists/Posts/Post.aspx?ID=25

Thanks Awesome-O! I guess I am the last to know about this fix.