You seem to believe that it’s an XP problem. Have you verified whether or not the behavior is the same on other versions of the Operating System, but same version of word?
Windows 2000, Windows 98/Me, Windows Server 2003, etc.?
Have you tried other word processors such as Corel Word Perfect?
I’m running Word 2003 on Win2K Pro, and it looks that way to me also – but I believe that’s just normal. When I print it out, everything looks normal.
Sorry to say so, but I would guess you’re barking up the wrong tree.