Whether you’re an Office user or you support Office users, you’re likely to work with more than one version of Office.  And some users need more than one version on the same system, which is possible  with the exception of  Outlook. You can have only one version of Outlook on your system.
The trick to getting different versions of Office to play nicely on the same system is to install the different versions in version order. For instance, you should install Office XP before Office 2003, and Office 2003 before Office 2007. When installing, be sure to deselect options that replace an existing version of Office and install each version in its own folder.
The truth is, you’d probably rather not have more than one version on the same system, especially if your system has limited resources. This is especially true when running Office 2007 on a system with pre-existing versions — the never-ending installations will drive you nuts!
If you must work with or support multiple versions of Office, consider setting up a virtual machine. Microsoft’s Virtual PC is free, and each virtual machine can run its own version of Office, completely separate from other versions. Be sure to check your system’s requirements; you might have to upgrade your system.