Rosie, take a look at this:
http://www.freeoffice.com/ It reads/writes .doc .docx. .xls and .xlsx for all your letters and spreadsheets. I got it as a free version in 2007 and was so impressed I bought the (now free) 2010 version.
I am pretty sure that MS auto updates break some things. XP Sp3 was a monster for resettting things as MS thought they should be and in the process 'broke' loads of software - and some hardware - which then needed to be updated to work with Sp3.
If MS Word Starter was preinstalled it should have an installation package, probably in a manufacturer's hidden HDD partition. This can usually be accessed from the computer's eRecovery system or similar.