Cannot Save New Document to SP2010 from Excel 2007

I have two users who cannot save a new file from Excel 2007 to Sharepoint 2010 using the network share path. They receive the following error:
You cannot save the file you selected. The folder you selected is not an actual file system location. 
However, other users can save this way with not trouble at all. 
When they have the Excel file open, they go to Save As... and the window opens. Then they type in the path to the Sharepoint library where they want to save the file: \\intranet\DavWWWRoot\site\library\
At this point, they should be able to click the Save button and the window will refresh to the Sharepoint library. They would then be able to enter the name of the file and click the Save button again. However, when they click the Save button the first time
to refresh the window, nothing updates and the path they just typed goes away.
My first thought was an issue with permissions, but I've checked and double checked that they are in the correct group.
Then I decided to go even more basic and have them use Windows Explorer to browse to the location. They were able to.
I then had them right click within Windows Explorer, select New, and click Text Document. Not only were they able to create the new text file, but I confirmed it updated
the Sharepoint library successfully. So, that obviously rules out any issues with permissions.
Out of sheer frustration, I even tried mapping a network drive to the Sharepoint library and having them save to the mapped drive location, which of course yielded the exact same error.
I have also double checked that the Webclient service is running on the machines. 
One more piece to note is that these two users are still running XP. They'll be upgraded to Win7 later this year, but this needs to work before then.
Any help or suggestions would be greatly appreciated.

Hi,
Did the issue only occur in Excel? What about the other Office suits?
Please copy the site URL to the File name Text Box in the Save as window. Like:
http://intranet\site\library
Regards,
George Zhao
TechNet Community Support

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