Thanks very much for all your work in tracking this down and posting this -- it solved my problem!
I too had this problem after installing SP1. But I believe it actually started happening after Office SP1, which was a few days after Vista SP1 was successfully installed without hurting anything.
The behavior I saw was that Word would not open files by double-clicking on them. The program would open, but the file would not be displayed. If I then used the Open command, I could open a file. However, I could not use scroll bars, and all but the most basic options were disabled. When I closed Word, it would crash every time.
I opened regedit and went to the key you described, but instead of deleting the whole folder I decided to try just deleting the Settings key, leaving the SettingsWordMail and Toolbars keys intact. Voila! Double clicking on files now opens them, I can scroll again, and Word does not crash on exit.