Well, I read your question when you first posted it, poised to tell you that
you could easily handle a document of this type as a single file provided
you work in Normal view, link graphics, use styles, etc. But when I hit the
part about 500 footnotes in the first 150-page chapter, I decided perhaps I
was out of my depth! I was hoping someone else, perhaps John McGhie, would
answer it instead.

I would still like to think that Word could handle this, but you will need,
above all else, plenty of RAM (and of course plenty of free HD space). The
usual suggestions for dealing with long, complex documents are:

1. Use styles conscientiously. Keeping track of style tags imposes less load
on Word than keeping track of an infinitude of direct formatting (this
reduces file size as well).

2. Avoid long tables, especially single-row tables. If you must have long
tables, find ways to split them: for example, let subheads be in text
paragraphs outside the table.

3. Link graphics as much as possible and don't display them except when
absolutely necessary. On the View tab of Tools | Options, check the box for
"Picture placeholders" and clear the box for "Drawings." This will suppress
the display of all graphics.

4. Work in Normal view as much as possible; turn off background repagination
if you can bear it (Tools | Options | General), but note that it will be
turned on again automatically if you shift to Print Layout view.

5. Many experts will advise you to avoid section breaks. As long as these
are used for good reason (beginning of a chapter with "Different first
page," change in page orientation or number of columns), they should be
acceptable, but do avoid manual page breaks wherever possible. And you can
keep running heads simple by using StyleRef fields.

6. Unless you're really wedded to footnotes (or required to use them), you
might think about using endnotes instead. Also, instead of having multiple
footnotes in a paragraph, you might collect them all into a single footnote
per paragraph.

If you're doing all the above already, consider that a document that hangs
Word repeatedly may be corrupt or verging on corruption. See
http://www.word.mvps.org/FAQs/AppErrors/CorruptDoc.htm

--
Suzanne S. Barnhill
Microsoft MVP (Word)