My WORD is running in compatibility mode and I have a feeling that is why I
can not edit or create new documents. How do I get out of this mode?
Compatibility mode doesn't have anything to do with not being able to
edit.
First: are you using a trial version whose time has expired, or a
retail version that hasn't been activated? If you're not sure, click
Office button > Word Options > Resources > Activate.
Second: If the first step doesn't help, you probably have a damaged
registry entry. Go to
http://support.microsoft.com/?kbid=940791 and
click the FixIt button.
Third: Any document in Word 97-2003 (*.doc) format that you open in
Word 2007 will be in Compatibility mode. That doesn't prevent editing,
but it will prevent you from using the new features of 2007 that don't
exist in earlier versions. It also won't prevent you from creating new
documents, which by definition are Word 2007 format documents unless
you specifically save them in Word 97-2003 format.
When you open a file and it's in Compatibility mode, click Office
button > Convert (which appears only when Compatibility mode is turned
on) and then use Save As to save it as a .docx file.