This solution is for the following errors when you try to edit an embedded Microsoft Excel file in the Word Document. I've experienced this problem on Office 2007 and Office 2010.
For e.g. If you have an embedded Excel sheet inside a Word Document like shown below, and want to edit. When you double click on it, you get any of the following errors or all of it. Microsoft Word simply won't let you edit it. It was a huge pain in the ass and took me many days to find a solution. It sometimes worked on some of my user's computer. I read through many forums, (forget about what support.microsoft.com says, it won't work!) and found many so called "solutions", but none worked for me. Some of the people suggested converting the table/ Excel sheet as explained in Error no 3. It throws another error.
PROBLEM: Microsoft Word not allowing users to edit an embedded Excel file as shown below.
ERRORS YOU MAY GET
Error 3: If you try to follow this solution:
1. Right-clicking on the Excel object
2. Click Worksheet Object -> Convert...
3. Choose Microsoft Office Excel Binary Worksheet
4. Click OK
Basically there is no solution yet for this issue, but there is a workaround which is explained below.
Step 1: Copy the Excel sheet from the Word (Click on it, and CTRL +C)
Step 2: Open Outlook and compose new message
Step 3: Paste the copied Excel sheet into the Outlook New message window
Step 4: Double click on the Excel sheet you just pasted in Outlook and it may prompt you:
Step 5: Click Yes you will be able to edit it.
Step 6: Once complete the editing, copy the same and paste back into the Word Doc (Replace the old Excel sheet)
Step 7: Sit back and Relax!
Hope this saved your time. Please share with us if you've a better solution to this problem.