“When an email with a docx attachment is opened in Outlook, all is fine. When it is opened with OWA, the user is asked to save the document before they open. When this is done, the default extension is a .ZIP If you change it to .docx it will open fine, but if you do not, it will extract to a bunch of xml files (Office 2007’s new format is zip-based).”

The cause is missing MIME types on the OWA web server. The admin can fix it site wide by adding the Office 2007 file types to the MIME settings on the server. This will tell the browser how to read it.

On the user side, IE has an option to open files based on content not extension - add the OWA url to the trusted (or local intranet) list and disable this option. It's in IE's tools, options, Security tab, trusted sites - look near the bottom of the Custom level. This should not be necessary if the MIME settings are correct.

Finally, an old Windows trick will allow users to save the attachments with the correct file name without adding the OWA site to the trusted list – enclose the name and correct extension in quotes and Windows will not add the zip extension. Ie, use “attachment_name.docx” format.