To remove the read-only password from Word documents (XP and 2003):
Invoke MS Script editor (Alt-Shift-F11)
Search for "Password"
Results in something like:
To remove the protection simply delete these two lines or to remove the password replace the "E454B08D" with "00000000" and save the document.
Alternatively, save the document as .html
Note: this is a different form of password protection from "File Open..."
edit: MS Script Editor has been removed form Word 2007.