Get Rid of the Drawing Canvas
The Problem:
When I click the icon to create a text box in the Mac version of Word, I get a nice, discreet box that I can resize as needed. But when I ask Word XP for a text box, it creates a half-page-sized box that takes over the document, and I have to spend a fair amount of time resizing the box and reformatting the text to get everything under control.
The Solution:
Welcome to the Drawing Canvas, Word 2003 and Word XP's tool for helping you put together drawings consisting of AutoShapes. Word 2000 doesn't offer this annoyanceand, as you've discovered, neither do Word X and Word 2004 for the Mac.
To turn off the Drawing Canvas, choose Tools 
Options, click the General tab, and uncheck the "Automatically create drawing canvas when inserting AutoShapes" box. You should then get a more manageable text box when you click the Text Box button on the Drawing toolbar.