Depends......
You need to do it properly
AND, you need to be using either Office 2003 or Office 2007. This applies to both Word documents and Excel spreadsheets.
What I mean by "properly" is you need to configure the correct ENCRYPTION (Office 2003 only) AND, you need to use a
LONG and
STRONG password or pass phrase.
If you need a "How-To", take a look at my Tutorials I wrote on the subjects:
Password Protect Microsoft Office 2003 DocumentsPassword Protect Microsoft Office 2007 DocumentsIf you follow the instructions, the documents can actually be very secure. Easily good enough to send Office Documents around the office and over the internet.
Hope that answers your question.