Often our network locations at work are not as private as we think we are.  For example, staff in IT departments often have quite wide ranging access rights which will include your files!  This is how to keep those documents secret in Word 2007:

With your document open, go to the Office Home button:

Select Save As and select the desired save option.  You will then get the Save dialogue box.

Click on the Tools button at the bottom left, and then choose General Options.

Enter a password in the desired field.  Password to Open means that people will have to enter the password before they can see the document, Password to Modify means that people can open it but need to enter the password to make changes.  You can use either of these or both together. 

Using Password to Open will give the maximum encryption of the file.  Password to Modify offers no encryption.

Click on OK.

You will be asked to retype the passwords to confirm them.  Do this and click on OK.

You may be asked if you want to replace the existing document, in which case click Yes.

Make sure you keep the password safe, but don’t forget it.  If you are unable to remember the password you will not be able to access the document, and neither your ICT Department or Microsoft will be able to help you.

To remove password protection just follow the instructions above, remove the password(s) leaving the fields empty and click on OK.