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Do you have MS Word installed on your PC? MobiPocket Creator (and Reader) use MS Word in the conversion process for DOC files.
A work around is to export the file as HTML from your word processor (e.g. OpenOffice) and import the HTML.
Note that MobiPocket Reader also imports DOC. It uses essentially the same process as Creator, but without the customization options. It has also been updated more recently, but DOC importing probably has not been changed since the Creator version.
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