1. Yes, if Office will be installed where the application is being run, Interop will work.
A basic introduction to interop with Word.[
^]
2. Office 2007 uses a format called
Office Open XML (OOXML)[
^]. The format can be edited without having Office installed. The OOXML format is a bunch of folders containing XML files, all zipped into one file with a docx (xlsx, etc) file extension. You can open an manipulate these files/folders directly.
3. You can use the
OOXML SDK[
^] as tool to manipulate the documents without all the work of #2.
4. There are commercial components available to manipulate these documents.