The Kindle doesn't present the NCX table of contents directly to the user - it's only used internally by the device software to place to "navpoint" tick marks on the progress bar, and allow single-key jumping to the next or previous navpoint using the 5-way controller. The OP reports that the TOC he created works fine - that's an inline TOC, part of the book itself. He also reports that the tick marks are present in the progress bar and he can navigate to next/previous chapter using the 5-way control, so the NCX file is present and correct. What he needs is a way to tell the Kindle where in the book to find the inline TOC.
Brian - what's needed is to add an HTML bookmark to your HTML file to mark the start of the TOC (e.g. <a id="toc" />), and then a way of creating a "guide" item in the OPF file that is built into the MOBI file, pointing to that bookmark as the start of the inline TOC. That's what the Kindle needs, to be able to find the TOC. Someone else who knows Calibre better will correct me if I'm wrong, but I don't think there's any way of doing that directly in Calibre while converting HTML to MOBI.
What I'd suggest is using Mobipocket Creator first to create an initial MOBI file, during which process you can add a "toc" guide item to point to the bookmark you created in the HTML file (using the above example bookmark, you would set the "toc" guide item to point to "your_book_filename.html#toc"). Once you've done that, you can load the resulting MOBI file into Calibre, then convert MOBI > MOBI, which will add the "hidden" NCX table of contents which provides the chapter navigation points for the 5-way controller to use.
Edit to add: If you add the "toc" bookmark at the appropriate point in the Word doc, that will translate into the appropriate HTML bookmark of the same name when you save that doc to HTML.
End of edit
I hope that made some sort of sense!
