Well I finally got this one solved. I actually thought that it was an installation issue but even after installing MS Office 2007 the problem remained.
I originally copied another user's profile on the system, in doing so it inherited all the permissions of that user instead applying them to my username.
I therefore had to change permissions to my username for all programs on the machine as well as hunt through the registry to change any references from C:\Users\CopiedUsername to C:\Users\MyUsername
After doing so and restarting the PC, Voila, MS Word would produce a list of Synonyms for words I chose.
Had this been a Vista Ultimate or Business the task may have been much easier than in Vista Home Premium.