Installing the Office Web Applications on your SharePoint 2010 installation is definitely a Good Thing – however when using the Word Viewer in SharePoint we found many documents would display messages like:

Word Web App cannot open this document for viewing because of an unexpected error. To view this document, open it in Microsoft Word.
There are a number of basic things to check immediately but none of them seemed to solve our problem.
Looking up the correlation token in the ULS logs reveals:
Librarian.SetCompleted(F0c7d1d5fd3234162833d31e20d3e9687m473392a6ecac4b85890f990f6b262c55m0846e19754004739ad93720821134224m, Silverlight, docdata.xml) - status = ConversionError
So the Word Viewing Service Application is having trouble converting the document into Silverlight to send to the client. So what now? – We found sometimes opening the document in Word, saving in 2003 format, re-saving in DOCX back to the library sometimes fixed it, but not for very long and not a very practical solution.
Some digging revealed the Word Viewing Service Application is in sand-boxed mode, which must limit its ability to convert documents.
Found an obscure post here, where one of the suggestions was to de-sandbox the Word Service App. The poster of the question didn’t seem to have a clue – but I thought I would give it a go. Issuing the following from the Sharepoint 2010 Management Shell seems to fix the problem, although not sure exactly if this is recommended from a security point of view.
$e = Get-SPServiceApplication | where {$_.TypeName.Equals("Word Viewing Service Application")}
$e.WordServerIsSandboxed
$e.WordServerIsSandboxed = $false
$e.WordServerIsSandboxed
IISRESET
Should show you if your Word Web App was sandboxed.
Later I have also discovered that if you install SharePoint 2010 on a domain controller that you may need to do the same thing to PowerPoint:
#(Please use the below script for PowerPointServiceApplication - You need to enter "Y" for the answer of each cmd)
Get-SPPowerPointServiceApplication | Set-SPPowerPointServiceApplication -EnableSandboxedViewing $false
Get-SPPowerPointServiceApplication | Set-SPPowerPointServiceApplication -EnableSandboxedEditing $false
Some posts from the 2010 Beta era also recommend making modifications to the disable the application/zip MIME type – but having not experienced any issues related to it, I won’t do it without reason.
In the server's c:\windows\system32\inetsrv\config\applicationHost.config
Add the line below in the end of the dynamicTypes.
<add mimeType="application/zip" enabled="false" />
Hope it helps some people out!