Using Confluence 3.5.6, Office Enterprise 2007 SP2, Windows XP V5 SP3 and IE 8.
The spreadsheet is embedded/attached to a page,
the edit document button is on the page and
after clicking shows the message warning me of unsafe files.
After that nothing happens.
Any ideas as to what is wrong?
We had the same problem as you do. An exact solution was never really provided, most likely it was due to a internal infrastructure issue.
The support case I had open with Atlassian support is not public available, but some links you can check out for indications:
http://confluence.atlassian.com/display/CONFKB/Files+Opened+with+Office+Connector+Cannot+be+Saved
https://jira.atlassian.com/browse/JRA-8179
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