Apparently, this is not recommended by Microsoft, but they have some pointers on how to achieve this on their website.

• How to configure Office applications to run under the interactive user account
• Considerations for server-side Automation of Office

I ran through the steps in the first article and I can attest that it's possible to use Microsoft Word to generate, for example, PDF files by printing them from a service. I have the feeling that most of those steps are not needed if Word is not accessed as a COM service, and all is needed is to create a new user, start and configure Word to have a running instance and then configure the service to run as that user.