reply to not working drive..
First of all floppy disks are one of the easily spolied disks. infact the diskettes are already being replaced by flashdrisks, memory cards and writable compact disk because floppies are less durable.
According to you, the computer says your A:/ drive works properly, if so, then it might be your floppy disk that is ruined, not the drive. Check this by getting a new floppy disk then insert it to the said A: drive, if the diskette works then the its probably your first diskette that no longer works. If the new floppy won't work It could be the a: drive that is spoiled, try to get a spare of this drive and check it with both floppy disks you have.If both floppy disks work, its the a: drive that does not work.
Getting your a: drive broken, does not have anything to do with the installation or upgrade of you office from 2003 to 2007.
To be able to upgrade your Office 2003 to Office 2007, you may need to completely uninstall the Office 2003 from Control Panel >Add/Remove Programs and install the Office 2007. The Office 2007 includes a feature that allows the user to choose the file format in accordance to preference (RTF, 97-2007).