How many documents are we talking about?
I'm not convinced your issue here is so much the capabilities of SP 2007, but more about how your lists/libraries are being designed.
If permissions are important for your target audience, I would suggest taking another look at how you are separating your content out. Ask yourself: "What am I as a designer, and the user as a stakeholder, getting from keeping all these files in one, or two libraries?"
Example: It might make more sense to give each working group its own document library, and set permissions on the library itself.
Stuffing a bunch of files into one giant library, and then asking "hey, how do I separate this out?" will probably come bite you in bum later down the road when the library grows to an unmanageable size. Building out web-parts should be a last-resort solution! This seems to be a design problem.
For a small quantity of documents, I might assign a specific set of permissions to the documents and/or folders in the list. But this probably isn't the best solution.
Remember that 2007 is for all intensive purposes, 2 major releases behind - in 2007, I don't think you can assign permissions to specific list views. Someone else might be able to chime in on a technical solution.