"Edit In" functionality is only available for Office XP and Office 2003 on the client, however I saw this workaround from a now unknown poster and was kind enough to confirm that it works.
"Office 2000 is not supported to edit documents within the Document Library under the "All Documents" view. But here is a work around to get the same exact function from Office 2000 as you do in Office 2003. This is for working with Windows 2000 and Office 2000.
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Open your particular document library.
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Make sure "All Documents" view is selected.
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Check Out the file (do not open the file just check it out)
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Click "Explorer View"
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Open the document you checked out and then edit and save the document.
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Now return to the "All Documents" view.
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Check In the document, and make your selections as well as enter your comments.
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Your changes should now be shown, as well as version history if enabled."
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