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Default Problem with Header size

A colleague was having problems with a Word document where the header
was taking half the page. There was only 1 or 2 lines in the header
but yet it would not size down. No matter what I try, the header will
not size down, and in some cases it actually gets bigger and takes the
whole page!
This problem has now migrated to my Word 2003 installation. When I
create a new document (blank), the cursor ends up in the middle of the
page. The header height size defaults to half the page, and there's NO
way to size it down.

Any ideas, on how to fix this?

Thanks.