Microsoft Word is a word processing package and DTP stands for desk top publishing, which is usually used as a generic term for making pages up - or typesetting them, importing and positioning photos and pictures, and generally getting material ready for publication.
Depends on the package really. But talking generally, there are many things you can do with Word that you can also do with a DTP package, like positioning pictures. However, you'd be better using DTP for such things. That's because a word processor treats a document as linear, while DTP packages treat a page as a jigsaw of different elements. So it's much easier to arrange the elements of a page in DTP. (If this doesn't make any sense, let me know and I'll try to be a bit clearer.)