SharePoint / Word 2007 Integration – Local Drafts Behaviour

We stumbled on this the other day when investigating an issue a client was having with opening up Word documents from a SharePoint site.
It appears that if you are logged into SharePoint as a different user to that which you are logged into windows with, then certain functionality within Word 2007 is disabled. This is presuming that your using Integrated Authentication and not Forms Based Authentication (although I would guess that if Client Integration is enabled in your authentication provider then you will have a similar experience).
When opening a document, if you select to use your ‘local drafts’ folder then there is no Server option at all within the Word menu. If you select to not use your ‘local drafts’ folder then a Server option is presented, however there is no Check In / Out option available.

It’s possible to continue working by either saving the document directly within Word and checking in via the browser, or by saving locally and uploading / checking in.
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