The ability to edit online is not working, I tried this in Office 2007 and still have the same issue. All I get is a logon box that refuses to authenticate.
It does not work, in fact when I uncomment the section as suggested in the file share-config-custom and restart alfresco share it breaks it completely, http 404 error.
I think the ability to edit online is a very importent feature for most users of a doc management product so not sure why there isn't a definitive guide to get this to work.
Note. I have my users authenticating against AD using passthru and it works fine.
I also tried changing the registry setting in Windows 7 to enable basic auth, this did not make a difference.