Spirited Away is a convenient freeware utility that does what it promises - Hides Apps that aren't in active use. Applications that are doing something in the background are also hidden.

Spirited Away works as a menu bar app and doesn't occupy space in the Dock. The amount of time it waits before hiding apps can be adjusted from 30 - 600 seconds. If you don't want an app to be hidden, you can simply select from a list of running apps the ones to ignore. By selecting a check box or not, you can select whether it runs at login. Spirited Away can be inactivated without quitting it or it can be quit from it's menu. It is also designed to cooperate with iChat.

I like and use this utility and I'm never without it.