Ahh...

macosxhints - 10.4: Avoid an Office 2004 save problem: The new version of Word has a problem when saving documents to network folders. Users with network home directories have a problem with Save or Autosave from Word 2004 11.2 (Office Service Pack 2) on OSX 10.4.2, and see an error message saying "Word cannot save this document due to a naming or permissions error on the destination volume." The first attempt to save succeeds; subsequent attempts to save, or autosave, will fail with the above error message.

The fault occurs unless a folder called .TemporaryItems has been created at the root level of any mounted volume containing the saved file; so if the user's home directory is contained in an AFP share called Homes, then there has to be a directory called .TemporaryItems in the Homes folder on the server. If the home directory is on another local volume called UserData, there has to be a directory called .TemporaryItems at the root of that volume....

This seems to fix the problem, not just for Word, but PowerPoint and the other Office apps.