Office 2007 and SharePoint

[SurvivorTiger]

We're trying to upgrade to Office 2007 and have a volume license media installed on our server so we can access office programs such as excel and word through sharepoint...this way we don't have to have office installed on each individual computer (of course we would have to acquire a license for each station as well). Has anyone done this in their environment and if so how's it working out?

My actual question is, if you click on "New->Excel Document" in sharepoint, does it open excel in a separate window as if you have excel installed on that computer locally, or does it open excel inside of sharepoint?

Thanks