Since no one here could help I resorted to MS support and they confirmed the issue with Vista. Here is the code they gave to me address the problem in case any of you run up against it:

DECLARE Integer CoAllowSetForegroundWindow in OLE32.DLL Object, Integer
poWord=CREATEOBJECT("WORD.APPLICATION")
CoAllowSetForegroundWindow(poWord, 0)
poWord.Visible = .T.
poWord.Application.Activate
poWord.Windowstate = 1
MESSAGEBOX('Word should appear. Press OK to close Word.', 48, "")
poWord.Application.Quit