What version of Office do you have? Is it a "Click-to-Run" version. If it was installed
using Click to Run technology, there will be no Office files in the Programs folder on the C drive, but on a virtual Q drive. In the Windows Control Panel, "Microsoft Office Client Virtualization
Handler" will appear in the list of programs.
According to the information from Microsoft, the dialog
appears for click to run scenarios where the path is missing a piece of information between the build that the user is running on and the latest available build.
If you are using a "Click-to-Run" version, you might want to consider changing to an MSI based version of Office. See:
http://office.microsoft.com/en-us/word-help/click-to-run-switch-to-using-an-msi-based-office-edition-HA101850538.aspx
I would make sure that you can perform steps 5, 6 and 7 BEFORE performing step 4.
Also, make sure that you have your Product Key FOR OFFICE. If you do not have it, you may be able to determine what it is by running the free BelArc Advisor, which will make an inventory of your system, including the Product
Keys for applications that you have installed.