Office Automation in web applications can have some drawn backs, like the example you've provided.
In fact, Microsoft suggests not use Office Automation at all in Web Applications, but use alternatives instead, and with the new Office 2007 file formats, that became easier to do.
This as been already refered on the forum topic http://www.outsystems.com/networkforums/viewtopic.aspx?topic=example-of-an-extention-to-create-excel-file-from-template-on-the-server, which references the MS article http://support.microsoft.com/kb/257757, where MS presents alternative APIs to directly generated/manipulate office files, without the need of having office applications (like excel or word) running in background.
These alternatives require C# development though, but they are available for the developer for free, since they are available as C# Classes from Microsoft .NET Framework.
Hope this information is helpful.
Miguel Simões João