After playing around with the preferences as you suggested, I realized something. I do have the problem when I log in as another user. The reason I didn't see that is that when I log in as me, Word has a blue background with white writing (my preference).

When I log in as someone else, there is a white background and black writing. The entire problem is so much less pronounced in that circumstance. Logging in as someone else, I changed the prefs to blue background, and there was the problem, as bad as ever.

Would it make sense to uninstall Office and reinstall a fresh copy?

Again, I appreciate your help and patience.

Anyone else have ideas?

It isn't clear if you have reproduced the preference settings that I showed above - they work for me to produce the first of the two screen captures I showed (which is I presume what you want).
Your post where you posted 3 images was not clear about what your settings were - you didn't use enough words or else not precise enough words.
Maybe try again with the preferences.
Otherwise try it when booted in Safe mode, etc.
Last resort is to reinstall OS X.
Second last resort is to reinstall Office.

Sorry if I wasn't clear before. I had the preference settings the way you have suggested. It definitely is worse with "enable quartz smoothing" turned on.

When I logged out and went back in under a different user, the problem is still there. I reinstalled Office for the Mac and that didn't help. I reinstalled Tiger and that didn't help.

The attachments show the current settings and the result, which is the best I can get it. I am at my wit's end.

I'll bet it is something simple. Wish I knew. Any other ideas?

You should avoid (at least for the moment) the use of terms like "better" and "worse" and just try to see if you can reproduce the results that I show in my post above. Use the same document and same background & font colours (which I chose to match your initial colours).

Picture 1 is what it looks like with "Quartz smoothing" enabled in Word preferences and "Display Profile" set to iMac (my only other choices are Generic RGB and sRGB), color resolution (Displays prefs) set to "millions of colors", "Font smoothing style" set to "Automatic - best for main display" and Text smoothing turned off for font sizes 8 and smaller)

Picture 2 is what it looks like after I've highlighted it and released the cursor. Unfortunately, if I scroll down and back it quickly returns to look like Picture 1.