** SECURITY ISSUE #1: THERE IS NO "DOCUMENT SECURITY"
Simply put, there is no "document security" in Word. Anyone with a copy of your document can change the text, formatting, layout, form fields, your copyright notice, and so on. Word does offer password-protection for documents, but this doesn't prohibit the reader from changing anything while viewing it or saving it to another file name.
** SECURITY ISSUE #2: CAN'T HIDE THE META DATA
Even more critical is "meta data" - private information such as the author's name (or network ID), name of the company your copy of Microsoft Office is registered to, total amount of time the document was worked on, and so on. This data is embedded automatically in every single Word document. To see what kind of information you could be leaking out, open any Word document and click on File / Properties.
Microsoft admits there is no easy way to remove all of the metadata information, although some of it can be "reset" via various procedures. Apparently an option exists in the new Word 2002 (Office XP) to make this easier, but again, it's not a simple procedure and the onus is still on you to remember to do it.
** COVER YOUR TRACKS (TRACKED CHANGES, THAT IS)
Word has a feature called "Track Changes" that helps people sharing a document to track what has been changed and by whom. If you use this feature but forget to fully disable it before distributing your document, you now have an instant, visible audit trail of document revisions. If you had any sensitive information in there, consider it no longer private.
Alcatel, an American telecommunications company, fell victim to this mistake earlier this year when they published a Word-format press release concerning a known security vulnerability in their DSL modem products. Read the story at http://morons.org/articles/1/188.
** THE INCREDIBLE SELF-INFLATING DOCUMENT
A 200-page Word document with 25 screen shots can easily total 5MB in size. Add more graphics or cross-references, and watch the file size magically balloon to 8MB or more. Your customers will probably not appreciate having to download a file of such a size, especially if they're on a slow dial-up connection - and especially if they're trying out your product before buying!
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