That`s extremely odd. The only thing I can think of is that Word is looking for the normal template primarily on a networked connection.
How are you trying to open Word? If it`s from a desktop icon delete it and set up another shortcut icon. (Right click the Word icon in Start>all programs - create shortcut and drag that to the desktop. Right click it to rename it.
If you open Word and go to Tools>Options>File locations Tab is there anything under Workgroup Templates? Also check where the link goes to for templates - it should be to c:\Documents & Settings\[your Use Name]\Application Data\Microsoft\Templates.
If all else fails follow the same path location and rename the file normal.dot to normal.old. Restart Word and it will create a new template for you. Note that you will lose any personalised formatting and have to recreate them.