Mad Jew reckons correctly on all counts. It's the little thingy that checks for Office (2004) updates. Doesn't really take up much in the way of resources, but it's easy to disable: Go to the Accounts preference pane, select the Login Items tab, and remove it from the list there.
You may want to run it manually every once in a while, though, since Office is afflicted with security issues periodically, and they do also fix crashing bugs on rare occasions. The application that does the checking and updating is Microsoft AutoUpdate.app, and it's usually found at the top level of the Applications folder.
Oddly, it looks like setting it to "Manually" doesn't remove that daemon from the Login Items list, which is mildly annoying. Then again, it is Microsoft.