I have been having this problem for the last week and just had a browse on the microsoft site - found a note that says this problem is caused by an automatic update (see Article ID : 940791). "You may experience several problems after you install an automatic update for Word 2007 on a Windows Vista-based computer".
As others have said here, the fix is to delete the Data registry subkey.
Microsoft's instructions for doing this are:-

To resolve this problem, delete the HKEY_CURRENT_USER\Software\Microsoft\Office\12.0\W ord\Data registry subkey. To do this, follow these steps:
1. Exit all Office programs.
2. Click Start , type regedit in the Start Search box, and then press ENTER.

If you are prompted for an administrator password or for a confirmation, type the password, or click Continue.
3. Locate and then click the following registry subkey:
HKEY_CURRENT_USER\Software\Microsoft\Office\12.0\W ord\Data
4. On the Edit menu, click Delete, and then click Yes.
5. Exit Registry Editor.
6. Restart Word.

This appears to have worked fine for my problem with Word 2007 and Vista. Good luck!