First you need to install the Chinese (Traditional, Simplified, or
both) IME in Windows (apparently it works the same in Vista as in XP).
Go to Start > Control Panels > Regional and Language Options >
Languages > Install files for East Asian languages, and follow the
instructions from there. (If it doesn't tell you what to do next,
click Details on the Languages page, then Add, and find the varieties
you want to install.)
You can then type in Chinese in any(?) application that supports
Unicode (such as Office), using at least half a dozen different input
methods.