Outlook 2003 can't open zip attachments on Windows 7

Problem: When using Outlook 2003 on Windows 7, users can't open zip attachments from a message - double clicking on the zip brings up the Open/Save dialog but clicking Open does not open it (the zip is saved in the securetemp folder each time you double click though). 

To open the zips, users need to save them to the hard drive then open if they want to use Windows Compressed folders feature. (If they install a zip program, there is no problem - zips open as expected.)

This is apparently "by design" and is related to the new Libraries file management feature. There is registry value that controls how the explorer handles certain file types for specific applications and this registry value can be edited as a workaround. 

However, because we don't know if editing this key might cause other problems it's highly recommended users install a 3rd party zip program instead. (There are a number of free and low cost zip programs available, many have more features than Compressed Folders.)

Open the registry editor and browse to this key:

Windows 32-bit versions:

HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\ Windows\CurrentVersion\ShellCompatibility\Applications\outlook.exe

Using 64-bit Windows, the key is:

HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node\Microsoft\ Windows\CurrentVersion\ShellCompatibility\Applications\outlook.exe

String: STRIPFOLDERBIT
String: VERSION Original Data value: 11.*,10.*,9.*,8.*,7.*

Recommended fix:Edit the VERSION string value, removing 11.*; 
New VERSION string value: 10.*;9.*;8.*;7.*

Alternate fix: Delete (or rename) the STRIPFOLDERBIT value

Reboot Windows.

I tested both registry hacks and both allow me to open zip attachments.