Word 2000 loosing document format when saving - how to fix?

I'm assuming this is something simple, it's on a friend's pc, and someone else has spent hours trying to fix it to no avail. What they tell me is happening is that when a document is saved (like a newsletter) all the formatting disappears and it's in the form of one big paragraph. It happens when saving new or when saving exsisting documents that are being worked on. It's happening on a nice old lady's pc, and I'd really like to help her get it fixed, but I'm a WordPerfect person. Any ideas what may be going on and how to correct it, other than reinstalling Word? Or should we just reinstall? Thanks!