Perhaps you have got Word '97 set up to use the INSERT key to paste from the clipboard. You can check by going to the Tools, Options... Edit Tab and see if the "Use the INS key for paste" option is checked. If so uncheck it to restore the normal function to the INSERT key.
Alternatively if you prefer to use the INSERT key to paste you may toggle the Insert/Overwrite mode by double clicking the "OVR" segment of the status bar at the bottom of the Word '97 screen. When the "OVR" text is grey the insert mode is active, if black overwrite mode is active.