Have you tried it with the CD in the drive? Do you have a firewall and or virus suite running? If so turn that off and try. If it don't start then uninstall it and then install with your virus/firewall turned off and see what happens.

Yes, I tried to install it with the anti-virus and firewall programs turned off. Still didn't work. All the reinstalls I've attempted have been with the original Word CD.

I have never seen this happen before so am tying to think of what is causing this. Look under programs and startup and see if office is listed there. If so delete it bt right clicking on each item there and select delete. That should get rid of the error at startup. If it does not then select start then run and type in msconfig and hit enter. Then look under startup and services and uncheck any office listings that you do not want to start at boot up. You can always go back and recheck these boxes later if you want to. They will not be uninstalled. Click on apply and  you will need to select reboot the system. After it boots up you will see a window from the System Configuration Utility Program telling you that you have elected to run a selective configuration. If you don't want to see this pop up each time you boot up, put a check mark in the box in the lower left corner. This should get rid of the startup error.