<p>Whenever I'm at a break point in a certain C#.NET application in Visual Studio 2008 and I fire up Microsoft Word 2007, word will fail to open until I restart the C# application. I have a few theories about why, but does anyone know for sure?</p>

A common cause of such hangs is (or used to be) an application that sent a broadcast Windows message on startup and expected a response from every window. If you've got a GUI application open in a debugger, then it won't be replying to Windows messages and so the sending application will hang waiting for a response. I recall the most common types of programs that used this technique were installer programs.
I don't know whether Word 2007 sends any broadcast messages, but that's only one way this might happen. There are a myriad ways that COM/OLE stuff can get hung up, and this probably seems more likely for Word.