Office 2007 should install without any problems I believe on Windows 8.1
I can't speak to the Photoshop program as we don't seem to know the version.
It is most likely a third party software product installed on the device that is causing this problem or else it's a security / permissions issue which I wouldn't normally associate with that particular error.
If you don't like the look and feel of Windows 8.1 then you could always resort to something like Classic Shell from here
http://classicshell.net/ Which may give you a more familiar interface to work from although it will do absolutely nothing in so far as resolving the problem.