In Word 2007:
On the Home tab of the ribbon, select the icon in the Font section that has Aa with a down arrow to the right (or, Alt+H,7). "Capitalize each word" is one selection from the drop-down menu. Alternately, select the text you with to put into title case, then press Shift+F3 (the F3 key, that is) to toggle among several cases.

I have to use this function quite a bit in my work, because certain documents have parts in all caps that I need in title case, so I created a keyboard shortcut for title case. With the text selected, mine is Alt+Ctrl+Shift+E.

Cheers!