Word 2007+
A discussion of how Spell Checker works and how it has improved over the years.Support.Office.com
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"The legibility of a typeface should not be evaluated on its ability to generate a good word shape.
Word shape is no longer a viable model of word recognition. The bulk of scientific evidence says that we recognize a word's component letters, then use that visual information to recognize a word. In addition to perceptual information, we also use contextual information to help recognize words during ordinary reading, but that has no bearing on the word shape versus parallel letter recognition debate. "
"ieSpell is a free Internet Explorer browser extension that spell checks text input boxes on a webpage. It should come in particularly handy for users who do a lot of web-based text entry (e.g. web mails, forums, blogs, diaries).
Even if your web application already includes spell checking functionality, you might still want to install this utility because it is definitely much faster than a server-side solution. Plus you get to store and use your personal word list across all your applications, instead of maintaining separate ones on each application."