Binding XREF's as opposed to inserting them is a touchy subject for me. So, I won't go any farther with that.
I just tried it in 2007 with bindtype set to both 0 and 1. Both times it resulted in the XREF's being bound. There must be another variable. I seem to remember seeing it in options somewhere but I can't find it. I also checked help, nothing there either.