Luckily, I figured this problem out myself, but not without spending a great deal of time in getting to the bottom of the issue. Perhaps there's a lesson for others here too, and so I'll summarize.
A day before the problem began, I'd decided to try one of these "driver update programs," despite having used several previously only to be disappointed. This program is called Driver Max.
To keep it short, while it came up with a sizeable list of drivers that supposedly needed updating, I prudently only did so with a modem (which I never use, but thought it'd give me a feel for their programs operation), and then later updated a display driver for my Sony Vaio. I researched the latter thoroughly before installing the new version, and it was supposed to work with this model, so I installed it.
Everything seemed fine until a day or two later, I discovered the weird problems (described above) when I went to use Word 2003. The list of fixes I tried, all to no avail, is too long to go into. Today I came across a very old post on the net, regarding erratic mouse/hourglass, etc., and they linked it to...the Display Adapter. I decided it was worth seeing if that was the problem, though you wouldn't think the problem would be only with Word...would you?
Into Device Manager, I tried to roll back the driver, but DriverMax clearly hadn't backed it up in full, as stated. Lucky for me, I have all original drivers on an external HD, so had to go that route. This was a major process, but finally succeeded in eliminating the problem with Word, and frankly, my display looks better now too. Needless to say, I cannot recommend DriverMax to anyone, and this is only a fraction of the entire story.
My advice: Back up all your Drivers, and if they're working fine I suggest leaving them alone. Otherwise, do one at a time, downloaded from the manufacturer, and make sure everything's a-ok before proceeding further. Moreover, I've yet to find one of these "highly touted" driver programs that are worth a dime. JMO