How do I get embedded Excel files to open inside Internet Explorer?

Question

Here's my problem: I have a web application that needs to open Excel files embedded into the web page. However, Internet Explorer (9 in this case, but the same goes for 8) only gives me the option to save or open the file and when I choose open, the file is opened within a new Excel window.

As far as I understand, opening files within IE should be the default behaviour, but for some reason that seems to have been altered in my installation and I can't seem to find a way to fix that. I'm running Windows 7, so there's no File Types tab under Folder Options in Windows Explorer.

Any ideas on how to fix this?

Solution

Opening Excel spreadsheets in IE doesn't get you the same functionality and menu structure as in Excel, but is possible.

Getting this to work requires registry hacks. If you intend to go this way, better create first a system restore point just in case.

The registry hack is described briefly for Office 2007 in :
Opening Office Documents (Word, Excel) in TWebBrowser on Vista and Office 2007

Which includes these registry changes :

[HKEY_LOCAL_MACHINE\SOFTWARE\Classes\Excel.Sheet.8]
"BrowserFlags"=dword:80000A00
[HKEY_LOCAL_MACHINE\SOFTWARE\Classes\Excel.Sheet.12]
"BrowserFlags"=dword:80000A00 

For Office 2010, the keys and values are slightly modified.

You may find some more detail about these keys and values in this old Microsoft article :
How to configure Internet Explorer to open Office documents in the appropriate Office program instead of in Internet Explorer
although it is oriented in the opposite direction.