Setting up for a "long file"

I am about to try and put together a longish file of family memoirs. At
present I have quite a number of separate files of "Glimpses". So I am now
plagued on how to put it all together along with a number of small pics.
I had always thought the way to go was with a "Master file" in Word 2003.
but if I read rightly a number are saying they are trouble, it seems that an
OUTline file with linking to all the various sub heads is the way to go.
Another site says to use publisher. I usually avail myself of Pub's delight
with my Christmas letters, but would it be better for me with my "Coffee
Table Book?"

One other thing if I may, a question regarding my Word's Normal.Dot
template.
I run XP 2003 and XP pro OS
I have "tinkered with my normal DOT template file for many years, it is now
bloated to nearly 400K, also I think some of my tinkering is far from
excellent. I am about to set up a largish set of "Memoir" files and have a
number of style changes in mind. The question is, Do I wipe out the
existing normal template and start completely fresh or do I create a
complete set of styles maybe not based on Body text, etc, ??

So may I ask this group for guidance please?
David