Note: This was tested on WebCenter Spaces 18.104.22.168.0
Step 1 - Configuring the Oracle Content Manager (UCM) connection properly:
Create a connection in the Enterprise Manager and set the following attributes:
Active Connection: Y
Content Administrator: weblogic
Root Folder: /WebCenter
Application Name: Spaces
RIDC Socket Type: socket
Server host: <UCM_HOST>
Server port: 4444 (usually)
Authentication Method: Identity Propagation
Web Server Context Root: /cs
Administrator User Name: weblogic
It is very important here to set the Root Folder and Application Name attributes. This will be used by WebCenter to create the necessary folders, roles and accounts in UCM !
Also check for the Content Server to have the CheckOutAndOpenInNative and WebDav components installed.
Step 2 - Editing with Office
Once you created the connection as described in Step 1 and restarted the Spaces managed server, the Edit with Word (or Excel, PowerPoint etc.) button should appear for all uploaded MS Office documents inside the Document Explorer taskflow.
Now the only issue that remains is to have MS Office actually open the document. Apparently, trying to open the document from the link provided by WC Spaces will get Office to issue a security warning and fail. This is because WC Spaces challenges the client for BASIC authentication and MS Office will refuse to send BASIC authentication if the URL is not a HTTPS URL.
Here you have 2 options: either you enable SSL for WC Spaces or you apply a fix to MS Office that will force it to allow sending BASIC auth data via HTTP (available here: http://support.microsoft.com/kb/2123563)