Use the File Association Settings:

You have to tell Excel not to use DDE to open the worksheet.
Open Windows Explorer, Tools, Options, File Types
Scroll down to XLS
Select Advance Button
Click on OPEN in the Actions window, Then Edit
On the 2nd line for application used add "%1".
Make sure to put the quotes around %1.
Example ...\Excel.exe" /e "%1"
Write down what you see in the DDE Section.
You will need this information if you want to return to the original settings.
Now DeSelect Use DDE
When you double click on any XLS file a separate instance of excel will run. Another advantage is that you can open more than one XLS file with the same name.

This problem has bugged the shit out of me since my office upgraded to Office 2007. Windows, I circumvent you!

-janelane, now I just need to get rid of that damned ribbon