i was thinking of recommending phpLiveDocx but on closer inspection i see that you cannot dynamically control the formatting. however if your documents are template driven then this might well be a very good solution. note that you do not need to use the zend framework just to have liveDocx. it's not difficult to write your own soap interface.
the alternative that i was considering is to use a wysiwyg javascript control to allow the users to create their input. and keep their input in html form to allow for easy editing in the wysiwyg editor etc, and version control through some easy php script (or you could use wordpress to manage the whole document creation and versioning process).
then when you come to output the document to MS Word, rather than the whole hassle of parsing the input and creating a document using COM (not to mention the licensing costs of purchasing MS Word for the server and having to install it (not just upload it, of course), you could push the html output for the document through an rtf generator which will be retain formatting and be openable and manipulable in MS Word.
Here is an rtf generator (takes html input):
another alternative is to use the PEAR Open XML class to create oXML docs which MS Word should be able to read just fine and, from MS Office 10, will be the native format for MS Word. This does not get over the problem of parsing html (or bbcode input) etc and manually creating the documents, but will at least avoid the licensing costs and maintain wider compatibility than pure MS Word.
as a last alternative (for the moment), for true compatibility across platforms and printers etc, make the clients keep their documents on the server and when they want output, dump the output to pdf using dompdf or fpdf or html2pdf or any of the other libraries. that way you stop edits from being done outside of your control, maintain version control through whatever document management system you have, and ensure that audit trail remains good (for example you can watermark documents with a draft sigil until such time as the client accepts the document as final, in which case a version stamp, document number can be appended to the footer of the pdf and the draft watermark removed).
of all of these, i like the last best. it sounds a lot of work but in fact it's probably less than an hour if you use pre-built tools. wordpress handles versioning and auto-save as well as user auth, but if you don't want the whole WP platform you can just borrow the post creation and auto-save scripts to save you time. and the output to pdf: there are tons of libraries, some of which are slightly better than others.