With 'No Changes (Read Only)' restrictions, you can only edit areas that you mark as exceptions beforehand. When you choose the 'No Changes (Read Only)' restrictions, you are given the option to mark the editable areas before the restrictions are applied.

With 'Filling in Forms' restrictions, you can only edit content controls, formfields and Sections of the document specifically designated as unprotected. When you choose the 'Filling in Forms' restrictions, you are given the option to select which Sections of the document to leave unprotected - you need to insert the Section breaks beforehand, though.

Dropdown formfields only work with the 'Filling in Forms' restrictions, but dropdown content controls can work with either - or with neither.

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Cheers,
Paul Edstein
[Fmr MS MVP - Word]