Try selecting just what you want to bullet point.
Other than that, sounds like a bug, so no suggestions other than to try a different version of Office/Open Office. £38.95 for the Ultimate Steal of Office 2007 (have to have an email ending in .ac.uk).
It is hard to tell from that screenshot, but it looks like you're locked into a certain paragraph type there. I'd actually have to play with the document to see exactly where it went wrong, but if that is all you have I suggest starting a new document.
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