I have noticed that when working with Word 98, it will often createvarious Work files in the same location as the document that I am working on. Their proliferation seems a function of how often I save the document, and I assume that it is related to Word's ability to track previous versions of the document (although I am still uncertain exactly what the rules are governing the appearance of these files).
In any case, if you quit Word, these Work files vanish. However, if you create enough of them before quitting, you may get an error message when you try to save your document, saying that you cannot Save because "too many files are open." Quitting Word and relaunching fixes the problem - or, if you want to risk it, you could try deleting the Work files without quitting. (Thanks also to Joseph Holmes.)
Update: If you get to the point where you cannot save your document, try Save As and save it as Word 6 file. Jeffrey Few found this worked.