I've been on a team that wrote a Word addin for a custom CMS system. It was written in VB6 and was able to take a Word document and turn basic formatting information - lists, bold, italic and even tables into HTML, which was uploaded to the server. It didn't create new pages or manage the site in the addin though.
I would definitely avoid choosing Word as the editor for your CMS from my experience. The biggest issue is each time you want to update the addin you have to redistribute it to the company or companies using it. You can do this is as an IE active-x control but it's far easier just to handicap the user to a limited set of styling options via a Javascript editor.
Word does have a powerful API for manipulating your content with, however we needed to disable so many options in Word to avoid unwanted fonts and so on, it resembled Wordpad more than Word in the end.
If it's a greenfield project and you have the time, I would infact recommend using Silverlight 4.0 over a Javascript editor. Version 4.0 has a richtextbox control built in, plus there is also the excellent Vectorlight one.