XP + Office XP

Yesterday, my wife while working on a spreadsheet apparently hit two keys simultaneously in error. The result was as follows:

1. when you highlight a cell, instead of the cell's outline appearing darker and solid, it appears darker and dotted (not ants and not moving).

2. in the lower right is an 'x'

3. when she called me yesterday in quasi panic she said that the sheet would not allow her to enter data in any cell.

She tried undo and the esc key to no avail. She could not close the sheet without saving given the amount of new work. I suggested selecting the entire sheet and copying to a new sheet. Oddly this maneuver not only allowed her to enter data in the new sheet but now allowed her to enter data in the original sheet. However, the cell condition as described in 1 & 2 remained in both the initial and new sheet.

What is going on with the cells and how do we get rid of it!?

Mark