Okay, this will amalgamate two matches closely adjacent matches:

#! perl -slw
use strict;

my $word = $ARGV[0] or die "No search term";

( my $text = do{ local $/; <DATA> } ) =~ tr[\n][]d;

$text =~ s[
    ( (?: \S+ \s+ ){1,3} )
    ( $word ) [[:punct:]]*
    (?= (
        (?:
            (?: \s+ \S+ ){0,6}
            \s+ ( $word ) [[:punct:]]*
            (?: \s+ \S+ ){1,3}
        )
        |
        (?: \s+ \S+ ){1,3}
    ) )
][
    my $extract = "$1<$2>$3";
    $extract =~ s[\s($word)][ <$1>]g;
    print $extract;
]gex;

__END__
Regular expressions have always been a weak spot for me, and I've got 
+a
 question that's got me stumped. Here's the problem I'm trying to solv
+e.
 I have somwhat large articles of text (returned from a search), what 
+I'd
 like to do is capture the word and X number of words before and after
+ it
 while tagging the matching word in the captured text. My inital thoug
+ht
 was to try something like this. The problem I have is that if there i
+s
 more than one term and they overlap, the nth term will not be annotat
+ed.
 So my next thought is lookahead/lookbehind, but they don't capture.
 Is there a way to do this with a single regex? Is a regex even the be
+st
 way to do this? Thanks, -Lee
[download]

A test

P:\test>517393 and
spot for me, <and> I've got a
capture the word <and> X number of words before <and> after it while
of words before <and> after it while
than one term <and> they overlap, the
[download]

As is, it won't try for a third or fourth, (and is currently repeating itself!), but it should be possible to do that using a independant subregex ((?{ $regex ))), I just haven't got it right yet. I'll have another go tomorrow when my eyes are open :)