It's a template problem.
C:\Documents and Settings\[your username]\Application Data\Microsoft\Templates
Close Word. Go to the above location, delete Normal.dot.
Open Word, adjust Word to how you want it - ex. Times New Roman as default font, show toolbars on 2 rows, etc. just customize how you want it.
File - Save As - navigate to the above location, document type should be Template. Save the file as "normal.dot"
The Normal.dot is the template that everytime you open Word it references that file.. it holds your macros, customize settings, etc. etc.
Well, it got corrupt and I haven't found a way to recover that file yet, except to make backups of it periodically when you start doing extensive customization within Word.
No other office program uses this kind of template. Excel, for example, has a static template it uses and you won't find this problem there. It's strictly within Word.
Let me know if that fixed it...