I am unable to save to or open from the Office Live site through Word/Excel etc.  I am wondering whether or not it is because I try to shut down services that aren't necessary for most tasks. I've made sure that WebClient is started, turned on sharing, but it's of no use.

I am able to log in through word fine, but when I try to open or save a file, I get the standard Windows file dialog.

I have deleted all passports and cleaned out the cache on my browser.

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SOLVED THIS PROBLEM MYSELF:

1) Run Internet Explorer with Administrator Privileges

2) Sign in to officelive.com through Internet Explorer

3) Run Microsoft Word with Administrator Privileges

4) Try to save a blank document to the site and it should work.