problem:embedded Word document is automatically converted to picture object

Since a few weeks, the use of embedded Word documents is giving problems. Normally, when a Word document is embedded in an Excel file, (via the option insert, object, MS Word document) it behaves as a Word document.
Now, however, it is inserted as a picture document. Also, older files which had the embedded Word documents, now treat the embedded objects as picture objects. This behaviour is in Excel 2002, Excel 2003 doesn’t show this problem. I suspect that it is caused by one of the recent (numerous) patches. Is it perhaps a trick of Microsoft to force users to upgrade their Office suite?