Thank you for these suggestions, John. I believe it was mainly a memory issue, but if you (or others reading this) want the details, here is what I did:
1. I did not install Entourage, so I can't comment on whether an Entourage Project Window might cause this problem. [I used to use Entourage 2004 along with my Treo and Missing Sync, but when Entourage corrupted and then erased my contacts, I uninstalled it and began using Apple's programs.]
2. Because I was initially editing "old" .doc and .xls documents, some which I was saving in the new XML formats, I suspected that this might cause a slower typing response. However, I did not notice any difference in typing response times between the "old" and "new" formats.
3. Activity Monitor did not look unusual (about 500-750 MB free) at the time.
4. I closed all documents and opened a new one--same slow typing response. The cut-and-paste-without-final-formatted-paragraph-mark suggestion did not improve the problem for me.
5. I rebooted to clear the RAM, and then I opened Activity Monitor. All resources available. I opened Word 2008 and started typing in a new document and noticed a marked improvement in the response time, including when I held down the delete key to delete an entire word or sentence (something that was sloooooow before despite my System Preference being set for the fastest key response time).
But I usually have Safari 3.0.4 running in the background, usually with multiple tabs/windows open. As soon as I opened Safari and a few sites, Activity Monitor showed Safari hogging nearly all my RAM. Returning to Word 3008, the typing response time was slower, leading me to agree with your suggestion that my problem might be memory related.
This leaves me with three complaints/concerns:
1. When did 2 GB of RAM become a de facto minimum requirement to run and use two programs without a severe decline in program response time?
2. Safari 3.0 is a MUCH bigger drain on my system resources than was 2.0.
3. I am waiting to upgrade to Leopard after the significant 10.5.2 update is released, but now I'm concerned that it may slow down my PowerBook even more. I am planning to purchase a 24" iMac in the next 2 months, and though I want to work with just one OS version, I am reluctant to slow down my PowerBook even more.
Thank you again for your comments, John. They were very helpful.