Sharepoint Services, Read only documents with form fields

When you say form fields, are you talking about the meta data information?

No.

I have many .doc's where the layout cant change.  But users should be able to fill out the forms and print ONLY.  If they want to save, they need to save a local copy.  Problem is, sharepoint only gives two options to open a document (not sure if we can change it) Read only and Edit.
Read only will lock the entire form and display "This modification is not allowed because the selection is locked."  I dont remember seeing this for 2003 at all.  Edit will allow users to enter data into the fields but also allow them to save the document which is not what I want.

If you don't want users to modify the document in the Sharepoint document library, why don't you given them read-only access on the document library. This way, when click on "Edit" it will store a cached copy on their local machine and not on the server.

And then have edit as the default option when opening a file from sharepoint?

So I set the read-only access through the actual NTFS permissions on the document folders in the \\companyweb or is this somewhere in sharepoint as well?

You can set the permission at the document library level by going to the library settings and clicking on "Permissions for this library"
I would create a group with "Read" access and add the users to this group (in Sharepoint)

Are we talking in the backend of the server or editing throught the front end
(can you tell I'm new) ?