Yeah, this can be a load of fun.  I use MS Word for various spell-checking
options, doc creation, etc...

I have a series of steps I use whenever I attempt to launch Word from ws.
They are detailed below (NOTE:  you've done a few, just check towards the
end to see if this fixes your issue -- look at the .regfile -- bear in mind
that this was written for Win2K servers, the options are slightly different
for 2003/XP but you can figure it out):

HTH,

Alex

1)  The local SAM administrator must create/be logged on to the system to
make these changes
2)  Create an 'OfficeAutoAcct' on the local SAM and assign this acct to the
'Administrators' group
3)  Open MSWord one time and then immediately close it (initializes it to
load registry hive)
4)  Open a cmd prompt and run 'dcomcnfg'
5)  Select MSWord from the list of applications in the list box and choose
'Properties'
6)  Select the 'security' tab and verify that the 'Use Default Access'
permissions for both
 'edit' and 'launch' and selected
7)  Choose the 'identity' tab and select 'This User'
8)  Put the info from the 'OfficeAutoAcct' in the boxes
9)  Push 'OK' and return the main screen
10) Select 'Default Security' tab
11) Make sure the following users are in the ACLs for both 'Default Access'
and 'Default Launch'
 - if not, add them

  *Admininstrators
  *Everyone
  *INTERACTIVE
  *IUSER_
  *IWAM_
  *OfficeAutoUser
  *SYSTEM

*** NOTE: If the system is WinXP, you might need to run the following .Reg
file to make sure the appropriate
          reg entries exist.

   BEGIN .REG FILE

  (Start copying here)

  REGEDIT4

  [HKEY_CLASSES_ROOT\AppID\WINWORD.EXE]
  "AppID"="{00020906-0000-0000-C000-000000000046}"

  [HKEY_CLASSES_ROOT\AppID\EXCEL.EXE]
  "AppID"="{00020812-0000-0000-C000-000000000046}"

  [HKEY_CLASSES_ROOT\AppID\MSACCESS.EXE]
  "AppID"="{73A4C9C1-D68D-11D0-98BF-00A0C90DC8D9}"

  (End Copying here)

   END REG FILE - SAVE WITH .reg extension

12) Restart the system - REQUIRED