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I want to use SharePoint 2007 or 2010 for our periodic access reviews. The current process is I have an excel sheet in the sharepoint and line managers open it to review the access of their staff. The spreadsheet has the name of their staff, application used, access rights, and line manager name. The line managers use filters to see the items that they need to review and then they will put either approved or revoke in the decision column.

The problem I have here is that some managers accidentally update items that are not theirs.

What possible features of SP 2007 or 2010 should I look into in developing a new process? Is it possible to have a list and assign items to specific persons so that only they can update those items?

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Yes this can be achieved using creating different views with filters ,

in your scenario create a People Picker Column to save the value of line managers in each list item.

after that create a view with the filters applying line manager = [Me] which will show only the items what are all having line manager value as the Current User .

Please refer Applying [Me] filter in SharePoint List View

so this way you can restrict the items shown to the users what are all they are supposed to access.

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