Thats very strange. Previously the word addin was strictly referencing Office 2010. An update pushed out a few days ago fixed this supporting office 2007 also.
I have a test XP machine running office 2007. I can uninstall the addin, reinstall and it all works.
Could you try once uninstalling, going in to word's options --> Add-Ins. Just checking there is no references there to WordEditor either in COM-Add-Ins or Disabled Items.
Then reinstall, open word and check there again.
Also what machine are you running this on? Still the windows 7 OS?