Microsoft has made known that they will be updating Office 2011 in-order to support versioning, auto save and full screen i.e. for Mac OS X Lion. But this updates from Microsoft can even take a few months to be ready.
Earlier the reason of Office for Mac 2004 not working on Lion was because Office 2004 was a PowerPC-based product and moreover Lion does no longer involve Rosetta. Microsoft feels that this is the right time to upgrade to Office for Mac 2011, well if you are upgrading to Mac OS X Lion.
Folks check out the video for Mac 2011: