Hi Kathik,
Do you the same issue happening from Rich client as well?
Do you see the same issue with Export to Excel option as well from Launchpad or is it specific to Excel 2007?
Is the issue consistent across web documents?
I think "Prioritize the formatting of the documents" should help, if not test the above options mentioned to ensure if its something to do with environment and also to keep some temporary alternatives if its working fine from rich client or with export to Excel option. I have seen a few excel related issues being reported and fixed in BI 4.0 at different SP and FP levels. So I would suggest you to refer to fixed issues guide of latest version available at below URL to see if you find the issue on similar as you are facing.
Thanks
Mallik