There are two ways to reply within a balloon:
1) Click on the little square in the upper right corner of the balloon. Your name and date appear. Clearly this function does not work in 2003.

2) Simply type in the same balloon below the first comment. Sadly, this also doesn't work in 2003, which is pretty odd.

second idea might work for short documents with a few comments. It won't work for my long documents (often 50 to 200 pages) with extensive dialog in the margins. An editorial query might be followed by 5 or 6 replies. The margins would be unreadable.

Am I the only person who finds this state of affairs unacceptable? I purchased Word 2013 as an editorial tool. Editors communicate with authors via the Track Changes balloons. There is no way I can require my clients to "upgrade" (HA!) to Word 2013 so that the comment balloons are usable.