A problem with Word isn't likely to be hardware-related; if there are problems with the core OS and having everything restored doesn't fix it, then we pull the unit and do hardware tests. Hardware problems are pretty rare (aside from keyboards & mice), but when they do they are most often dead hard drives and the occasional power supply.
Nobody SHOULD be storing anything of importance on their local hard drives; other than their iTunes libraries, we tell everyone to store their files on the network. Not only is networked storage on a RAID-5 array, it is backed up off-site every night, and it is access-controlled, whereas anyone can access C:.
Of course, I can only speak for our department and organization.
