Hi Stan, thanks for the post. Based on my knowledge, you can use the upgrade package to update to Office 2007. For detailed information, you can post the issue to the following newsgroup, as this forum focuses on Windows SteadyState specific issues:
http://www.microsoft.com/office/community/en-us/default.mspx?d=1
The reason why we recommend posting appropriately is you will get the most qualified pool of respondents, and other partners who read the forums/newsgroup regularly can either share their knowledge or learn from your interaction with us. Thank you for your understanding.
Sean Zhu - MSFT