Hopefully this isn't too late to be useful, but here are my experiences:
1) People use Word and use it poorly because they don't know any better. If your documents are 10 pages or longer, I would consider another system.
1a) If you're going to use Word or don't have a choice (budget), build a style manual and make certain every person editing those documents is doing it the same way.
1b) It seems that the best success with Word comes from using their Styles feature for formatting.
2) My company had used publishing software (Pagemaker), which has strength in organized, predictable formatting. The downside is editing is more tedious.
3) If your manuals have overlap in content (e.g. a common safety section or parts-ordering page, storage requirements, regulatory statement, etc) you might consider a structured authoring software. Structured authoring means you can build a document dynamically from a number of separately-saved chunks. This way if you update content in a chunk, all of the documents that use it will update upon re-opening. I dabbled in structured authoring software but not well enough to make a specific suggestion.
4) Hire or consult a technical writer to get your stuff converted and organized. Many companies dump documentation as a low priority in both resources and process control. This has a negative effect on every aspect of the product since customers won't use it as effectively and of course, blame the manufacturer when things don't go well.
It's been mentioned that operating manuals belong to this or that group within the company. They are all wrong - it requires a truly cross-functional team. Marketing needs to control depiction of the product and brand, Engineering needs to write the guts and make sure it is technically accurate, a technical writer needs to pare it down to simple, effective language, legal needs to address regulatory, contractual, and liability issues, etc.