I was recently using Office 2007 and in general the contextual spell-checker is great and has found more than a few errors. However if it gets it wrong the consequences can be bad. I saw this one today:
"Please send me a bank check"
Microsoft Word offered the contextual correction that bank should be changed to "blank."
In this case the word "bank" is traditionally either a noun or a verb. In this sentence the contextual spellchecker must see that an adjective is appropriate and it chooses one that's a close fit. Oops.