I do not think the following scenario is possible using the current version of Windows SharePoint Services 2.0:
We need to have end-users open Office documents (Word, PowerPoint, Excel) from a SharePoint site and NOT have IE and Office open the documents from the web server. E.g. have the Office documents opened from the browser cache, which would not require any authentication against the server.
This works as desired if browsing the SharePoint site with Firefox, for example. It also works as desired for non-Office documents like PDF. But IE makes the Office applications open the document from the server, which we do not want.
There are a few reasons we need this to work this way, which I won't go into now. Suffice it to say, I've been on Google, Yahoo, and the newsgroups and none of the solutions that I've found works the way we desire (htmltransinfo.xml, DOCICON.XML, ONET.XML, etc.).