Is there a keyboard shortcut to highlight the selected text in MS Word 2007?

You can set them in Word Options, Customize, Keyboard Shortcuts.

Edit: Actually, it's already Ctrl + Alt + H.

An alternative is to use Alt + H + I.

You can set them in Word Options, Customize, Keyboard Shortcuts.

Goto "Tools" menu and select "Highlight" option

Assign keyboard shortcut to it like "Ctrl+H"