Check for multiple versions of Office or trial version or previously installed Office under control panel > Programs and Features. If so uninstall previous version or trial version then try installing Office 2007.
Also try the steps provided below and check if that helps.
Note: - Serious problems might occur if you modify the registry incorrectly by using Registry Editor or by using another method. These problems might require that you reinstall the operating system. Microsoft cannot guarantee that these problems can be
solved. Modify the registry at your own risk.
1.Click Start, type regedit in the Start Search box, and then press ENTER.
2.Locate and then click on the following registry sub key:
3.On the File menu, click Export, and export the key on the desktop.
4.On the Edit menu, click Delete, and then click Yes.
5.Exit Registry Editor.
6.Click on control panel->add/remove programs ->click on the office suite installed.
7.Click on change->add remove features.
8.Click on the drop down arrow at the top on the left hand side of office.
9.Select run all from my computer and click on continue.
10.After the configuration is completed click on close.
Open word and see if spell check is working. Let me know if this helps.
While the procedure that Nayana suggests is a thorough one, a quicker option to try first is to repair Word. Go to Office Button | Word Options | Resources and click Diagnose. This will run Microsoft Office Diagnostics to find anything that is missing
or broken and fix the problem. You may be prompted to insert your install disc.
Microsoft MVP (Word) since 1999 Fairhope, Alabama USA http://ssbarnhill.com