Selecting Content Types from the "New" menu gets the wrong content type

The scenario

• Create 2 breand new content types/ Provide each one with a word 2007 document as the template (each with some different text to test success).
• Attach both content types to a document library.
• From the "new" dropdown on the doc library select the last content type on the list.
• Add some text add save back. The content type attributed to the document will be the first one in the list (the default) *even though* we selected the correct type.
• saving to disk and inspecting "item4.xml" inside the docx shows the wrongly selected content type. Correct the documents content type in sharepoint, download to disk and inspect item4.xml and you will see the correct content type.
  

This is a bit of a weird one. I'm going to do a bit of investigation and report back through my blog. It's rather frustrating when you have a different workflow that kicks off on the creation of a document of each content type