all citations converted to being one citation ...

I meant Endnote’s www.endnote.com for tech support…   I can’t quite picture what you are seeing.  perhaps some screen shots would help.  Word looks at the library that is open in Endnote.  If the library is not available, then Word consults the “travelling” library.  You can see what library is being used on the last tab of the “format bibliography” menu window.  (at least in X2, I think it is the same in X1)  I am not familar with Word 2007, so if it is trying to use that, I can’t help.