apps 'Not Responding' when use the insert command

P4 3.0GHz, 1GB RAM system, running Win2k, logged in to a domain controller.

It seems as though we are having an issue with whatever function is being used when you try to use an insert or import command from an app, such as MS Word.

First encountered this problem today while using a piece of software called Leica Geo Office.  Most of the program works fine, however, when you click import, the explorer style window to chose the file does not open.  All we get is an hourglass and when we check the taskman, it says Not Responding.  The rest of the system is running top knotch, even the rest of this particular program.  This is a regular function for us that has been done thousands of time before, even yesterday.  I cleaned all of the temp/junk files from the system, repaired invalid reg entries, minimized the startup tasks to very minimal (nothing out of the ordinary), I defragged, I ran chkdsk with no errors, I completly uninstalled the software and reinstalled.  So thinking that may not just be limited to Leica, I opened MS Word and went to insert an image from a file; same problem here.  The little window to browse for a file to insert does not open and I'm stuck with an hourglass and Not Responding in the taskman.

Any ideas would be greatly appreciated

Thanks

Deano