Office 2004 Applications Won't Work in Lion
You must have Office 2004 which is a PPC-only suite and will not work in Lion. You need to upgrade to Office 2011 - Mactopia - or you can try the freeware suite, Libre Office, that is functionally similar to Office 2007 for Windows except it works on Lion.
You may want to consider as well:
These two suites are similar to Libre Office but not as current or as well-supported:
And, then there is Apple's iWork suite:
Pages - word processing and layout
Keynote - presentation
Numbers - spreadsheet
Each can open and save Office compatible files. They may be purchased separately via the Mac App Store for $19.99 each.
(Access to the Mac App Store requires Snow Leopard 10.6.6 or higher and an Apple ID.)
If you were using Office 2004, you should know that this Office doesn't work on OS X Mountain Lion and Lion because it's a PowerPC program.
You have to upgrade to Office 2008 or 2011, try Pages or install LibreOffice. All of them work with Word files
Thanks for the help. I did install LibreOffice and did get it figured out. I can open my documents now. The new problem is, the word documents I have sent to my co-workers do not open for them . Would I be better off buying Pages with iworks. The reviews on this aren't all that great, but I am greating a bit tired of all the hassle. Thanks for your help.