Since the license is free, and the only things you really have to agree with are (roughly speaking):
1. you aren't directly competing with Office 2007 products and
2. if you're going to use this UI, do a good job of it.
it seems quite reasonable.
If you want to make money cloning Office 2007, you'll have to take the risk that Microsoft will attempt to enforce its IP rights. If, as some have argued, this is prior art and invalid, you'll have a good argument. On the other hand, if you're just using the Office 2007 to make your application look cool and seem to be part of the Office suite, Microsoft has given you a way to do with without running the risk of violating their IP.
The license is voluntary. Your position without signing it is exactly the same as it would have been if Microsoft never offered the program. The only thing the program does (and I, for one, appreciate it) is make it safe to use that UI without fear that you are violating Microsoft's IP. I suspect there are many companies out there who's legal departments have told them they can't use that UI for fear of lawsuits. This gives those companies a way to do so safely.