Mailmerge master document won't open if excel data file is open

I've been producing a directory using Word and a named range in an Excel
worksheet for many years without any real problems. Now I've upgraded to
Office2007, it seems I can't open my mailmerge 'master document' in Word
unless I first close the file where the data exists in Excel. If both
programs are open at the same time, Word produces an error to say that the
database engine can't find the (named range) object. Then, when I've
completed the merge, I have to close Word, otherwise when I try and open the
file in Excel again, I get an error message to say the file format or
extension is not valid. It's a pain keep having to close one or the other
down and I'm pretty sure I didn't have to do so in earlier versions of
Office. Am I missing something?