Folder Permissions & 2007

We have a share drive that contains multiple folders with individual
spreadsheets that each user maintains. We have set up these folders with
protection so users can’t delete the spreadsheets, copy others or modify the
contents, only save/edit what already exists. A group was created with the
users as members, permissions were granted to “Allow� all permissions except
“Delete Subfolders & File� and “Delete�, and these are marked as “Deny�.
Since there are multiple folders, they all inherit permissions from the main
folder.

In Excel 2003, the users are able to save as needed. Now with a few testers
that have been upgraded to 2007, when they access this spreadsheet they are
no longer able to save; Access denied. Contact your administrator.

We have removed any protection to the spreadsheet, saved as 2003 & 2007
formats, created new spreadsheets in that same folders to verify nothing was
corrupt and tried different computers and profiles. Nothing seems to work.

Has anyone run across a similar issue? What would cause 2007 to treat
folder permissions differently?