After some experimentation, I found a solution. It's not ideal, but it works. Simply close the document before switching applications. When I do this, Word's CPU usage drops to basically zero. It's also close to zero with a new blank document open. Somewhere between the blank document and my 3.5mb file, though, Word becomes quite CPU hungry -- and this is on a G4/733 with 1.2gb of RAM.
So if you want a responsive system, remember to close any large documents that you may have opened in Word before putting it in the background. I have not done any testing with Excel or PowerPoint to see if this same issue extends to those applications or not.
UPDATE: Based on an email from Philip D., I tweaked some settings and appear to have eliminated the problem (at least based on what's happening now). I have Word in the background with the 3.5mb file open, and it's using less than 1% of the CPU. What changes did I make? I turned off "Check spelling as you type" and "Check grammar as you type" in the "Spelling and Grammar" preferences tab. I also turned off "Show live word count" in the "Window" portion of the "View" preferences. This seems to have reduced Word's appetite for background CPU power to nearly zero.

