When i tried to open an attachment(1meg) a window popped up stating, "Can't read the File-header/Unknown File format"
Yet it is a word.doc text file and should open as easy as pie!.
The only way i can read the attachment is to open it in Wordpad, but i am at a loss at to why it doesn't work by simply clicking on the attachment. This has never happened to me before. A similar sized file sent as pdf gave me no problems at all. Any suggestions?.

It could be your security settings in your mail utility outlining how attachments of certain types are handled. I know an MS Office update killed the ability to send a .doc for me. (I use Outlook from Office 2000, not Outlook Express.) I had to uninstall office, purge the updates from my system, then reinstall Office 2000.

Is it possible the sender sent a word.doc as a "Text" attachment?

Have you tried right clicking it and saving it somewhere? Does it save as a .doc file?