See http://support.microsoft.com/?kbid=302629 "WD2000: 'Word
Cannot Create the Work File' Error Message When You Open a File".

Chris Grigg wrote:

I am getting a Micosoft Word error as follows 'Word could not create the work
file. Check the temp environment variable.' This is often followed by ' you
are working without a Word work file and memory is nearly full. Save your
work.'
Having saved the work the system then locks.