Many people have asked me if there is an easy way to go from Word XML into XHTML.
I've already mentioned that we have a tool available that transforms from Word 2003 XML into HTML. You can download it here: http://www.microsoft.com/downloads/details.aspx?FamilyID=19676b18-1bcd-4852-93ba-0b5a203ea731&displaylang=en
This is actually a pretty cool tool. There are a number of ways you can extend it. By default it will add a behavior to IE so that any XML file that has the Word PI (processing instruction) will automatically have an XSLT applied that converts it into HTML that can then be rendered by the browser. It also does work to store the embedded images to a temp location so they can be referenced by the resulting HTML.
You can also write your own XSLTs and register them for the viewer to use. Then when you open a Word XML file, you will have the choice of XSLTs to apply. This is just handled with the schema library (the same way you can register XSLTs for Word to apply when it opens your XML).
Additionally, if you want to register some views for your own XML that you want applied in the browser, you can put a PI in the files that identifies it as yours and register with the tool that you want it to also render your files instead of the default XSLT that IE will apply.
There are other folks out there who are also building tools on top of Word XML. Here's a blog I was just pointed at this morning where Oleg has worked on modifying an earlier version of the XSLT that we had released: http://www.tkachenko.com/blog/archives/000195.html
If anyone else has a tool they've built on top of WordprocessingML or SpreadsheetML please send me the links. I'd love to take a look.