Fix

I had this problem a while ago and found that it took me some time to hunt for the fix.  It came out of nowhere.  All of a sudden the mouse cursor stopped working in MS Word 2007.  Sure the cursor would move around, but that was all that it did.  Clicking anywhere within the document did absolutely nothing.  It was as if MS Word 2007 was not recognizing my mouse.  At first I thought it was related to my mouse drivers.  I use a Razer Lachesis, so I checked for driver updates.  Then I googled the problem and went through pages of different problems; still no joy.  Somewhere in the mix though was a thread at the bottom of a conversation in the Lockergnome forum.  I tried it out and it worked:

1. Exit all Office programs.

2. Click Start, click Run, type regedit, and then click OK.

3. Locate the following registry subkey, as appropriate for the version of Word that you are running:

• Word 2002:

HKEY_CURRENT_USER\Software\Microsoft\Office\10.0\Word\Data

• Word 2003:

HKEY_CURRENT_USER\Software\Microsoft\Office\11.0\Word\Data

• Word 2007:

HKEY_CURRENT_USER\Software\Microsoft\Office\12.0\Word\Data

4. Click Data, and then click Export on the File menu.

5. Name the file Wddata.reg, and then save the file to the desktop.

6. Click Delete on the Edit menu, and then click Yes.

7. Exit Registry Editor.

8. Start Word.

If Word starts and works correctly, you have resolved the problem. The
problem was a damaged Word Data registry key. You may have to change
several settings to restore your favorite options in Word.

After deleting the registry values, everything worked as it should have.  It was the first and only time I have ever encountered the problem.