Document variables and document properties are very similar. Both are
stored as part of the document's file, so they stick around through
closing and reopening the document and/or Word. There are three main
differences:

- A document variable can be created or altered only by VBA code,
while a document property can be created or altered by the user in the
Custom tab of the File > Properties dialog.

- A document variable is always stored as a string, while a document
property can be given a data type of string, number (integer), float,
date, or boolean (true/false). In practice, the conversions between
strings and the other types are mostly automatic.

- Setting a string-type document property to an empty string ("") just
makes it an empty string, while setting a document variable to an
empty string deletes the variable (so trying to get its value after
that results in an error).

To create a document variable, you can just assign a value to a
previously unused name like this:

Sub CreateVariable()
   Dim myString As String
   myString = "Hello World"
   ActiveDocument.Variables("NameOfVariable") = myString
End Sub

You can use the ActiveDocument.Variables.Add method, but it doesn't do
anything this simple assignment doesn't do. Besides, if you try to use
the .Add method with a variable that already exists, you get an error;
but the simple assignment just changes the value.

To read back its value, you can insert a DocVariable field in the
document:
   {DocVariable NameOfVariable}
or you can write code that uses its .Value member:

Sub ReadVariable()
   MsgBox ActiveDocument.Variables("NameOfVariable").Value
End Sub

To create a document property, you must use the .Add method of the
CustomDocumentProperties collection:

Sub CreateProperty()
   Dim myString As String
   myString = "Hello World"
   ActiveDocument.CustomDocumentProperties.Add _
       Name:="NameOfProperty", _
       LinkToContent:=False, _
       Value:=myString, _
       Type:=msoPropertyTypeString
End Sub

(To store one of the other data types, change the Type parameter.) The
kind of assignment that works to create a new document variable
doesn't work for document properties. :-(  But you can change the
value of an existing property by assigning a new .Value to it.

To read back its value, you can insert a DocProperty field in the
document:
   {DocProperty NameOfProperty}
or you can write code that uses its .Value member:

Sub ReadProperty()
   MsgBox ActiveDocument _
       .CustomDocumentProperties("NameOfProperty").Value
End Sub

There are a few other differences, but they're more esoteric -- for
example, I think custom document properties can be read without
opening the document by using dsofile.dll (see
http://www.word.mvps.org/FAQs/MacrosVBA/DSOFile.htm).

--
Regards,
Jay Freedman
Microsoft Word MVP        FAQ: http://word.mvps.org