Well, I didn't see this documented anywhere else on the web... so:
Problem: Word frequently shows the hourglass (every 5 seconds or so), disrupting editing of documents. Only Microsoft Word 2000 had this problem.
Fix: Turns out there was a weird interaction with some (seemingly unnecessary) service installed by my Brother HL-1030 printer driver. I disabled the service "BrSplService" and it seems to have solved the problem.
Notes: Thanks goes out to the guys at www.sysinternals.com and their free Filemon tool. It really helped show where the problem was. The tools there rock.
Tags: brother, printer, windows, office, o2k, delay, stall,