You may have already gotten your answer, but I had this similar problem
with a user on Word XP. I was able to fix the problem with Detect and
Repair in Word.

computrldy wrote:
My son in a Word Doc had letters piled up on top of each other--could not
undo. Could separate them by backspacing and tabbing them out, one at a
time.
Went to Format- Font and tried everything there. It wasn't the same as the
condense feature. That squishes them together. These letters were stacked
in a pile! I've never seen anything like it!!!
How did he do that! We had to retype the whole thing!!!