You need to look at the manual inorder to understand teh complete concept of overset text and text re-flow.
Look at this help file:--http://help.adobe.com/en_US/indesign/cs/using/WSa285fff53dea4f8617383751001ea8cb3f-6f99a.h tml
I've read that section over and over again for the past hour.
What is strange is that I've one line that when I add text to it, it causes this condition. I can add text to other lines, and it won't.
I have now deleted 3 lines and retyped them from scratch and the document seems to be behaving. There was absolutely nothing unusual that I could see about these lines but something about them kicked in the problem.
You may have some sort of Keep Option coming into play.
If you have Smart Text Reflow enabled inthe preferences, ID should add a new page and new frame if you edit text and it goes into overset, otherwise you must pick up the overset and add a new frame manually. ID only adds frames and pages during the initial placement (import) of a text file or when using Smart Text Reflow.
Thanks - deleting and retyping 3 lines of text from scratch in the offending area solved my problem, although I do not know how.
I'll check "smart text reflow" - it is not something I'm familiar with.
For now, this case is "closed." Thank you, Peter and Manish.