Word 2002 fixes the problem only if you select the appropriate option in
Tools | Options | Save: "Make local copy of files stored on network or
removable drives."
By my reading of the article, it is supposed to fix it for floppies
regardless of the setting, and for larger devices if you set the
option.
The explanation of what the option does is found in article Q277010
and is rather complex. Even for Microsoft, the article sets a new
(low) standard of intelligibility. Here is how I understand it.
First, this started as an attempt to eliminate the problems with using
files on floppy disks. (It seems appropriate that Microsoft should
finally have a shot at fixing this problem now that floppy disks are
in the twilight of their career.) When you use Word 2002 to open a
file on a removable medium of 3MB or smaller total drive size (i.e. a
floppy disk), Word first makes a copy of the file in the TEMP folder,
then opens the copy. All of Word's temporary files are thus on the
hard drive, so Word does not run out of space. Whenever you push Save,
Word updates both the temporary file and the original on the floppy.
When you close the file, Word deletes the temporary copy file. All of
this is built-in and not optional.
What setting the option does is to enable all of this mechanism if the
file is on a network or removable drive that is larger than 3MB.
(Actually, the article disagrees with itself on whether the copy is
actually made for large drives. Testing is needed.)
However, Microsoft has also grafted on another piece of function,
which is controlled by this same option. It seems that in prior
versions of Word, if your computer went into Suspend mode to reduce
power, all file locks on the files that you were working on were
dropped. The consequence was that if the file was on a shared network
drive and someone else tried to open it, they would succeed. They
could make changes to the file and save them. Then when your computer
woke up again, you could save changes that you had made to the file,
overwriting the changes the other user had made.
Apparently if you set this new option, Word does not drop the file
locks if your computer goes into Suspend mode, avoiding the
possibility of lost edits by another user. The cost is that since the
locks are held by your suspended computer, the setting prevents any
edits by another user until you and your computer wake up.
The article also claims that if the option is turned on, the usual
"owner file" is not created by Word when a file is opened.
Bob S