Try putting in the full path to the file, and use a .doc or .docx file.
I have an old version of Word installed on a desktop (bigblue). From my laptop it is working.
II logged on to the desktop and created c:\temp\test.doc. I just added some characters and saved it.
I used this script from my laptop.
$Word = New-Object -ComObject Word.Application
"Got Word"
$Word.Visible = $false
$OpenFile = $Word.Documents.Open("c:\temp\test.doc")
$OpenFile | format-list
"Its open, sleeping"
start-sleep 10
$OpenFile.Close()
$Word.Quit()
"Done"
[bigblue]: PS C:\temp> .\wrd.ps1
Got Word
Name : test.doc
Application : System.__ComObject
Creator : 1297307460
Parent : System.__ComObject
BuiltInDocumentProperties : System.__ComObject
.... lines removed for brevity ...
FormattingShowFilter : 0
Its open, sleeping
Done