Trevor, I think the automatic process works from someone pasting the copy and a small popup appears for you to confirm?
James, it might also depend on the browser you're using.
See this from the disqus comments from the CKEditor site - http://ckeditor.com/addon/pastefromword
"The problem is that you have disabled ACF. Please bear in mind that browsers see MS Word "HTML" differently. In case of IE there are font tags and in case of Chrome there are styled spans.
When you are disabling ACF, you are pasting content as browser sees it. With ACF enabled, the new word filter (it now works with ACF) will produce more unified code (there will still be some differences however). Please see the results with ACF enabled."
This could help?