Word97 docs dont open in WinXP

When in Windows XP, opening a Word 97 document that has a ‘password to modify’ will fail if the user has NTFS permissions of Read. No password is asked for.

Removing the password to modify allows access.
Some users are unhappy removing passwords as they find NTFS permissions a bit confusing.

What is going on?
I suspect it is a problem with the permissions on the registry – I am aware of other problems with Word 97 on Win XP caused by registry permissions.

But then I am just guessingand it could be anything.

I am looking for a way to allow users to password protect their documents for modification and still allow users to view them.