Show/Hide button is set to Hide, however you still see both source and target text in Trados?

[spiros]

(First try pressing Ctrl+Shift+8)

At times something goes awfully wrong in Trados/Word interaction and in Tools → Options → View the item Hidden text becomes checked.

To remedy this issue, you simply uncheck it.

[spiros]

And when it comes to Word 2007 this setting is accessible by the Office button on top left, Word Options and then Display.