Though Office 2007 relies on the same activation technology that Office 2003 does, Microsoft is denying the allegations that the new suite will come equipped with a software-disabling kill switch. While it would be very easy for them to disable the software on the user end after a failed activation or a time expiration, the functionality of an unactivated Office 2007 suite will remain largely the same that Office 2003 does: After 25 unactivated launches, it reverts to a limited functionality mode that still allows documents to be viewed, but not much beyond that:

Under Office 2007's activation rules, users can launch a suite application up to 25 times without entering the product key. Once that launch allowance is exhausted, however, the applications slip into what Microsoft dubs "reduced functionality mode," under which the user cannot create, edit, or save documents. Viewing and printing of documents, however, are allowed. Office 2003, released three years ago, gives users a grace of 50 launches, twice as many as Office 2007 will allow.
Windows Vista, however, will become disabled upon expiration of its timer unless the system is activated, similar to Windows XP. Largely, it's business as usual - and despite the newer "Software Protection Platform", things won't change much as they are now for verification purposes. Add-ons and other updates will still require a validated copy of Office or Windows.