I’ve always wanted to dig into this, so I finally did.
You can open a student’s Word document and add comments, revisions and such, and the student can see HOW you changed the document. It’s very cool and could save an instructor a TON of time. Below is a link to a video showing how it works in Word 2007, and I’ve played a bit and it seems to work the same in Word 2010.
Sweet deal – well worth watching the video.