Here was a weird one, Word 2003 froze on startup, opening the document in word 2007 was the key to it, in the bottom left, it flashed up trying to connect to \\servername\folder\test.dot. Hmm in our case the servername was the name of a server that had been decommissioned! WOrd 2007 allows you to hit ESC to abort this. Word 2003 just freezes up.
The resolution is to stip this out of the file, either by using WOrd 2007 or by using the link belows solutions:
http://support.microsoft.com/default.aspx?scid=kb;EN-US;830561