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Wordnet at Princeton University has developed a program for highlighting and linking words in text documents to there online dictionary. I am not sure exactly how it works but it works good. Maybe some bright person here could write a hack to use this tool in Xoops. Here is the link where you can see how it works.
http://poetry.tetto.org/define/19720/If anyone has any ideas how to get this done please let me know I can try to help.
James