Strange one this one! Looks like there’s an MS update that causes problems with Word 2007. The symptom this time was that you can’t click anywhere in a Word window – although everything else seemed to work ok?
Turns out – to fix it, you need to remove/rename the following registry key:
HKEY_CURRENT_USER\Software\Microsoft\Office\12.0\Word\Data
This is documented in KB 940791: