When you are using the Document Handling feature in the Microsoft Dynamics AX Client, you might have noticed the Show file checkbox at the top of the form. When this check box is checked the selected element (document) from the grid will be displayed directly below the grid, embedded into the Dynamics AX DocuView form.
This works well with Microsoft Office 2003 applications for example. When you are however having Microsoft Office 2007 installed, instead of showing the file content embedded into the Dynamics AX DocuView form the Office Application is launched and shows up in a separate window.
The root cause of this issue are some Registry values (BrowserFlags) that are set differently for Microsoft Office 2007 applications.
This is described in much greater detail in the following KB Article:
If you wonder why Dynamics AX is also affected by this issue described for Windows Internet Explorer the explanation is simple: The Dynamics AX form uses the Web Browser control to show the embedded application.