How to force MS Word 2010 to split words anywhere
I'm sure there's a more elegant way to do this, but if you make all spaces in the line non-breaking spaces (cntrl-shift-spacebar), the line will only wrap when it gets to the end of your fixed width text field. Just checked. You can do a find/replace with a normal space in the find field, and a cntrl-shift-spacebar in the replace field. Seems to do the trick.
This is very long after your original post, but I was having the same problem. The tutorial here explains how to automatically add hyphens at line breaks: http://www.officetooltips.com/word/tips/using_automatic_hyphenation.html
Open Page Layout tab, in the Page Setup group, click Hyphenation and choose Hyphenation Options
You will be presented with a dialog where you can set up automatic hyphenation for your document.
Three years on, but I have an answer. Install Japanese language to your language settings, reboot Word 2010 and then go to paragraph options. On the Asian Typography tab check the second check-box, which says something like "Allow Latin text to wrap in the middle of a word" (I use Word 2010 in Japanese, so I'm not sure of the exact text in English).
There you go, text wrapping in the middle of words that you can toggle on and off for each paragraph.