My roommate just had this problem with Microsoft Word 2003, and I found the fix using the Google search engine. Here’s what you do:
Tools -> Options -> Edit
Check “Typing Replaces Selection”
That’s all my roommate had to do. For the sake of completeness, the fix also says:
Tools -> Options -> General
Uncheck both options that have WordPerfect in them
Hope this helps someone.

THANK YOU SO MUCH!!!
Since February since you’ve posted this, why didn’t you post this earlier. Just Kidding… What a find! Thank you
Cheers first result in google and it worked!!
Oh… thank you a ton. i didn’t know what was going on! :o)
You are my savior… at least when it comes to AP English assignments