I spent several hours last week cleaning up the errant formatting in a complicated, 30-page Word document that was loaded with custom styles. It seems the author pasted material into the file from several different applications. Unfortunately, the formatting of the source documents made the trip as well. The resulting file was a formatting disaster that bore little resemblance to the template the document was allegedly based on.
One of the best features Microsoft added to Word 2007 is the ability to change the program's default paste setting so added material adopts the formatting of the destination document. To do so, click the Office button and choose Word Options > Advanced. In the Cut, copy, and paste section, select Match Destination Formatting in the "Pasting from other programs" drop-down menu.
An article on Microsoft's Word 2007 Help and How-To site describes how to control the formatting when you paste text between documents and within a document as well as from other programs.
Word 2003's paste options come up short
Since the company I work for still uses Word 2003, we've got no such option because you can't change Word 2003's default Keep Source Formatting paste setting. At least the Paste Options button that appears after you paste in Word 2003 (and Word 2002) does make it easy to make the change manually with each paste. Your other paste options are to Match Destination Formatting or to Keep Text Only. You can also select a style or other formatting.
Of course, many Word users consider this button a nuisance because it blocks material immediately surrounding the paste. To show (or hide) the Paste Options button in Word 2003, click Tools > Options > Edit and check (or uncheck) "Show Paste Options buttons."
You can also choose "Smart cut and paste" and click the Settings button to view your other paste options, but none entails changing the default "keep source" setting. The Microsoft Support site provides a bit more detail on Word 2003's paste options.