I am using Word 2003 with Windows XP, SP2.  When I am working on a Word document that I loaded from my OfficeLive workspace, after I have made some changes Word tries to save the document repeatedly.  I can stop that behavior by clicking on the x in the upper right corner of the message, but that is a nuisance.  Apparently Word is trying to do a background save but the Live program doesn't respond, in contrast to what happens when you press the save button in the OfficeLive workspace.

Can you check under Word->Options to see if your AutoSave setting is set to "enabled" and at a given time interval? If so, this is causing the repeated Save attempts to OLW and since its not an explicit Save request, the "Saving to OLW" dialog keeps waiting.

If you turn off your AutoSave setting, you will no longer see this dialog.

Kavitha