This panic occurs because default template file ("Normal"?) is missing. This can be solved by copying C:\Documents\Templates\Word Processor folder from a real 9210 to ...NokiaCPP\EPOC32\Wins\C\Documents\Templates directory in the SDK.
Another way to resolve this problem is to rename file 'blank.uk' to 'blank' (no extension). For debug version this file is located in 'C:\Symbian\6.0\NokiaCPP\Epoc32\Release\wins\udeb\z\system\templates\word' folder (if you installed SDK on default location). Otherwise just search for file 'blank.uk' and rename it.