Import Excel 2007 into SQL 2000 with OpenRowSet - Access Denied

[Database Administrator]

I am trying to import data from an Excel 2007 file into SQL 2000 using the
following:

SELECT * FROM OPENROWSET('Microsoft.ACE.OLEDB.12.0','Excel
12.0;Database=c:\Excel2007.xlsx', 'select * from Sheet1$')

This works fine on my XP Pro machine running a local SQL instance. I have
Office 2003 with the 2007 compatibility pack installed. I have also installed
AccessDatabaseEngine.exe

However when I try the exact same on a 2003 server which has Office 2003
with all of the above I get the access denied error below.

OLE/DB Provider 'Microsoft.ACE.OLEDB.12.0' IUnknown::QueryInterface returned
0x80070005: Access denied

The logoin account that I am using has full admin priveleges on the server.
I can open the Excel file with Excel 2003.

Also, if I change the filename in the query to a non-existant file, it
returns the same access denied error.
Maybe the error does not pertain to the file itself, instead could it be
something else?

Any ideas?

Thanks
Gary