I use Word 2003, but I saw the same problem with the previous version.
Basically, I have a numbered outline that is part of a defined style. Here's
how it looks:

a. blah
b. blah
c. blah
d. blah
e. blah
f. blah
g. blah
h. blah
i. blah
j. blah
k. blah
l. blah
m. blah

I have defined the outline to place one space after the letter number. The
"Text Position" settings are both 0.75" and "Aligned at" is 0.5." I have to
add 3 spaces to the i, j, and l items to get them to line up.