Microsoft has released a useful add-on for Word called Redaction.
It will be particularly handy for organisations answering Freedom of Information requests. As the blurb says:
Sensitive government documents, confidential legal documents, insurance contracts, and other sensitive documents are often redacted before being made available to the public.
“Use the Word 2003 Redaction Add-in to hide text within Microsoft Office Word 2003 documents. You can mark text to redact and then create a new, redacted version of the document in which the marked text is replaced with a black bar that cannot be converted back to text.”
I can’t see it will be much use to personal users. If you don’t want someone to see something you would just save another copy without that information, I think.