adeel, just like you posted a screen print of the Word screen, post a screen of the Tools -> Options -> "View" options tab. (use ALT+PrintScreen instead of just PrintScreen to capture the active window/dialog_box. Let's see what you got there and maybe we can help you.
I just checked Office XP and you should have a "Text Boundaries" check box under Tools>Options>View (as FrancisFan said). Look below the "Print and Web Layout options" heading on the "View" tab. It's the last option under that heading on the left.
OK, when i click the text boundries (which i did miss initially) there are lines that come all the way from the top to the bottom and this is with the text boundries checked