That's interesting. As I experiment with different UI actions, I am starting to get the impression that it is not just any app modal dialog that causes the issue; rather, I think the dialog has to be an Office app modal dialog. In fact, the problem may not be the dialog per se, but may tie back to OLE, embedded documents, and such. The infrastructure that those features rely on is pretty antiquated and was developed during a time when all sorts of app-level scenarios were capable to locking up the whole Windows GUI (i.e. the time of "cooperative multitasking".) Relatedly, this may not be a Windows 7 issue so much as it is an issue that arises when doing advanced, cross-product things in Office.