"Kerning" is a type of spacing between pairs of characters that would
otherwise appear to have too much space between them, such as A and W or V
and A (see, for example,
http://en.wikipedia.org/wiki/Kerning). In hot-type
days, the type pieces were actually shaved down so that they could fit more
closely together. In computer typesetting, this is done electronically.
Since this requires processing time, and since the result is much more
noticeable at larger font sizes (and especially in large headlines that are
more likely to be in all caps), Word economizes by turning kerning off at
smaller font sizes. How well it works also depends on what kerning pairs are
built into the font definition.
