OP, I played around with the file you sent me. Unfortunately I am unable to reproduce your problem. I am able to navigate around the sheet and edit without much problems. It is slightly slow, but then you do have a lot of stuff in that worksheet! My CPU utilization goes to around 25% while opening or closing the file, but otherwise stays very low. Excel takes up around 400MB of memory with just this file open, but that's not unusual for 2007.
I am on Win XP, on an I5 2.53 GHz Thinkpad with 3 GB of RAM.
But your spreadsheet
does have
some problem.
I checked : your last cell seems to be Row 347, Column 944. (To see for yourself : CTRL-G, ALT-S, ALT-S, enter; or, F5 (Go To), 'Special', 'Last Cell').
But when you click the 'End' then the 'down arrow', the cursor goes all the way to Row 1048576, the last possible row in excel. This tells me that somehow, some content or formatting was done that impacted this last row, and Excel is remembering it despite all efforts to clear it.
The steps to reset the Last Cell (ie, delete stuff you don't want) are given here :
http://support.microsoft.com/kb/244435. I tried all that, but did not see any difference : the last cell stays the same, and END+DownArrow still takes me to the ultimate row.
As far as I can see, clearing these rows or deleting them makes no difference - but then, I do not see the show-stopper you see, so whadoIknow? When I try to copy and paste just the relevant data cells into a new file, the file size actually grew from 1.6 MB to 2MB

, so even that does not seem to work.
So here's what I recommend : use the link I posted above to clear the Last Cell on your spreadsheet, save, re-open, and see if it makes a difference; maybe I'm not seeing it but you will. If not, identify another machine with larger specs (faster CPU, more memory) and try it there.
Last resort - save it to 2003 version. It might still function.
I'll keep working on this, and tell you if I've a breakthru.