|Have you tried this yet?|
type \\server12\work\projects\orig.txt >> \\server12\work\projects\new.txt
Much simpler than the code you where doing.
Oops never mind I see what you are doing.
So have you tried just copying the file to you C: drive working on it and sending it back like...
copy \\server12\work\projects\orig.txt c:
For /F "tokens=1 delims=" %%A in (c:\orig.txt) Do Echo %%A >> c:\new.txt)
copy c:\new.txt \\server12\work\projects\new.txt
But like said above what is the error you are getting?