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Below is a section of sample code which can change the precision of the coordinates displayed in the ArcMap status bar.
It is currently a limitation in the software that the code must be executed in the Project and does not work when stored in the Normal.mxt.
'Changes decimals that you see in the bottom of the ArcMap display
Dim pDoc As IMxDocument
Dim pRepUnit As IReportUnitFormat
Dim pNumericFormat As INumericFormat
Set pDoc = ThisDocument
Set pRepUnit = pDoc
Set pNumericFormat = New NumericFormat
.AlignmentOption = esriAlignRight
.RoundingOption = esriRoundNumberOfDecimals
.AlignmentWidth = 15
.RoundingValue = 5
.ShowPlusSign = False
.UseSeparator = True
.ZeroPad = False
Set pRepUnit.NumericFormat = pNumericFormat