Yes, that's the issue. You have to place the document in a shared directory that all users can mount in identical fashion. This can be a problem if you have both mac and windows users as they will mount the directory with diffrent formats. You sometimes have to create a calculation field that computes the correct format for a given user in order for both mac and windows users to see the same shared document.
Okay so I made a shared folder between myself and 3 others to access these shared word.docs in filemaker (on a shared drive) but i still can't access the document through Filemaker. There is a picture icon in the container field, but when I double click on it nothing happens :(
How did you insert the document? As a file? I believe you will need to either click into the field and use Export Field Contents from the Edit menu or write a script to do this and attach the script to a button (or set up the container field as a button). With a script, you can export the field to the temporary items folder so that you don't leave a copies of the file cluttering up your system every time you open the file.
If you are opening the file to edit it, you will have to re-insert the edited file to save the changes.