word converted my text to asterisk

Not if you closed the document and saved ... and even then it's unlikey unless you have the setting turned on in Preferences to always create a backup and closed the document without saving. With a backup copy being made you could go and get that one.

Also, if you are running Time Machine you could go back to a time sequence prior.

If you haven't been making backups or using time machine then I'm sorry to say it's lost.

Now what's causing this?

There is hope that SP1 has corrected this awful problem so tell us what Office release are you running. 14.1.2 is the latest and if you weren't running that version ... that maybe is the problem. If you are running 14.1.2 then I think the Microsoft Engineers will be wanting to get as much information from you about what was occurring on your system when this happened.

How long had this document been open? When was the last time you restarted Word? When was the last time you logged off your computer? When was the last time you restarted your computer?