OK - I should mention that I had already done a Clean Install over the weekend with no results. I did as you suggested, removing the Prefs folder - it would not let me rename it, so I dragged it to the trash and created a new folder named Preferences in the System Folder while booting from the Software Restore Disk. After restarting, I attempted to launch MS Word - still have the same result - Type 2 error. I've also re-run Tech Tool Deluxe and the Apple Hardware Test disk, both with no reports of any problems, and have rebuilt the desktop again. I also restored the old Prefs, since there wasn't any difference in the outcome.
Present thinking: I'm considering the purchase of another hard drive, such as a WD 7200 ATA/66, that I can install and run in the second (upper) part of the drive carrier, in essence reloading all of my data and programs on a new fresh hard drive in the remote possibility that this is a hardware issue and not a software problem - while not a perfect solution, I'd still have access to all of my old data and so on with a brand new drive with new software - ASSUMING that I can boot the 2nd (slave) drive as a stand-alone drive and that the original "master drive" would show up on the desktop when booted from the slave (2nd) drive. I could then, theoretically, re-install Office:mac 2001 and run it without issue. Before I do this, I'm open to any further advice, and, FWIW, I've been in touch with a local Apple Macintoch technical person who is I believe as baffled by this as I am, as he's thinking it could be RAM related - which isn't showing up on any tests.
(The issue with MS Word, for those interested, is that I need to be able to communicate with business customers who are using the defacto standard, so Word is, for me, essential, and there really is no alternative.)
Lastly, for anyone with experience on MS Word, through Office:mac 98, 2001, or similar - when I reload the program and get a new number, it would stand to reason that this new number would show up in the About... dialog box, correct? This isn't happening, as it still gives me my original number, which tells me (unless I'm completely off-base) that the problem, whatever it may be, might not be allowing me to re-install the program. This of course doesn't make any sense to me, since I can still run the program from a bootable CD.
Any ideas, anyone? Thanks for your help and ideas.