This is apparently caused by registry corruption.

The registry key (for Word 2003) is ...
   HKCU\Software\MICROSOFT\Office\11.0\Word\Data
and the corrupt value in it is "Settings".

(For earlier versions of Word, substitute an appropriate number for 11.0)

If you rename the "Settings" value then next time you start Word, a new one
will be created from built-in defaults.

If you are not comfortable with the registry, take great care or find
someone to help you.

If you are comfortable with the registry, I would be interested to see the
key and would appreciate it if you could export the Data key and e-mail it
to me. If you can't or don't want to do so, it's not a problem.

--
Enjoy,
Tony