It might be that you have Word installed incorrectly. I would try reinstalling it. I base that on this [msdn.microsoft.com] info from the Microsoft web site.
There are also some issues with activating an out of process program from an Active Server Page. In IIS 4.0, there was a metabase variable that you had to set, but apparently that is no longer required in IIS 5.0.
could be a permissions issue. To test, you might want to create a temp Virtual directory and then give execute, read, write, etc. permissions in IIS.
I use a process in a ColdFusion app that creates an instance of MS Word. When I first did it I was getting a similar error from the ColdFusion Service. I just gave the proper permissions in IIS, the physical directory in Win2k, and checked an option under services that stated "enable interaction with desktop". Worked fine after that.
You might want to comment your code after Dim MyDoc Set MyDoc = Server.CreateObject("Word.Document")
to see if this line is giving you the problem, if not then comment line by line to find out which specific line is the problem.