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Unfortunitly this is M$ Forceing Office Updates: Here is a response to the very same Question I ask on one of the MCSE sites;
RE: Select Word as email Editor box grayed out
You need to make sure that the versions of Outlook and Word that you are
using are compatible. For example Outlook 2003 can not use previous
versions of Word, so if Outlook 2003 is installed and Word 2002 then Word
will not be available to use as the e-mail client.
I hope this information is helpful.
Partner Technical Lead — Outlook/Office Setup
Microsoft Technical Support for Platforms and Business Applications
Now your forced to upgrade your office programs in your 50+ Corp enviroment just to maintain functionality – still looking for a registry hack