User Identity: Office Applications assume a user identity when they are run, even when they are started by Automation. They attempt to initialize toolbars, menus, options, printers, and some add-ins based on settings in the user registry hive for the user who launches the application. Many services run under accounts that have no user profiles (such as the SYSTEM or IWAM_[servername] accounts), and therefore Office may fail to initialize properly on startup, returning an error on CreateObject or CoCreateInstance. Even if the Office application can be started, without a user profile other functions may fail to work properly. If you plan to Automate Office from a service, you need to configure either your code or Office so that it will run with a loaded user profile.
I'd try to find a 3rd party library that can write into Word or RTF files, or if you can limit your support to Word 2003, look into WordML.