With its cosmetically enhanced menus and toolbars, Word 2003 is now smoother and prettier, but the bulk of Microsoft's efforts are hidden under the surface. There are a quite a number of enhancements that will appeal to everyone, but the majority of Word's new features are aimed at the corporate market, with support for XML, Smart documents and IRM (Information Rights Management).
Word can now save documents in XML format, which preserves the formatting and properties without resorting to Microsoft's proprietary DOC format. You can also create templates that mark parts of the document with a custom XML Schema, and any document created from these templates may be saved as a pure XML data file, so the data could be sucked into back-end databases or, if needed, through BizTalk. Corporate IT departments can now use Word to capture data from users, and the data is validated as it's typed according to a custom XML Schema. What's more, if your template is marked with XML, you can provide a custom Task Pane. This helps the user by suggesting appropriate content, help or tools, depending on the document.
Word documents can also make full use of the IRM features built into Office 2003. Documents may be secured so that only authorised people can read them. Some companies will find this useful, but it's implementation needs to be done carefully.
Another new feature is the ability to set up documents and templates that only allow formatting through styles, rather than direct character or paragraph formatting. You can also restrict the level of editing allowed to each user in different sections. All of this is great for the corporate market, but there are some features – like the new Reading View – that will appeal to everyone. Many Word documents are opened without being changed, and the Reading View makes reading on screen easier by reducing clutter and using ClearType font smoothing.
You can see a document map or thumbnails of the pages to help navigate large or complex documents, and you may also increase or decrease the text size on screen without affecting the document's font size.
Word has definitely improved with this release, but corporate IT departments will benefit the most. For everyone else, there's little reason to upgrade from Word 2002.