Normal.dot
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Normal.dot is one of the most important files in Microsoft Word. It is the master template from which all word documents are created. It determines the margin defaults as well as the layout of the text and font defaults.
Although normal.dot is already set with certain defaults, the user can change normal.dot to new defaults. This will change other documents which were created using the template usually in unexpected ways. Because of this it is highly recommended that a user not change normal.dot, but instead creates a custom template based on the normal.dot.
You should also be aware that the normal.dot does not control page size, that is done through the default printer setting.
[edit] User errors
A common user error is actually writing a document on the normal.dot file. This will result in any new document having this same document text already written on it. To fix this problem, a user must reopen normal.dot, erase the text, and resave. Many problems in Microsoft Word can stem from normal.dot being corrupted. It can cause Word to open incorrectly, cause hidden module errors, contribute to virus issues, or be the root of text and formatting problems. However, it is a bad idea to simply delete the corrupted normal.dot file and install a new one as many custom settings already created by the user (known or unknown) affecting many existing documents could be affected with devastating results. It is recommended that the user change the name of the normal.dot file to a different name (e.g. OldNormal.dot). This will cause Word to think that normal.dot has been deleted and it will create a new normal.dot with all the factory defaults. The user can then see how other documents have been affected and determine if it has solved their problem. If this change has had negative effects, they can restore the original (OldNormal.dot) by renaming it normal.dot once more. To avoid having to do this renaming procedure it is highly recommended that a user keep backup copies of normal.dot in case of one becoming corrupted, especially if they have created custom settings.
The default location the Office Installer places the file is:
Windows XP: C:\Documents and Settings\<CURRENT USER>\Application Data\Microsoft\Templates
Windows Vista: C:\Users\<CURRENT USER>\AppData\Roaming\Microsoft\Templates