From what I understand is that bitcoins are backed on nothing but the time used for the cpus to create them.
Common myth. Bitcoins aren't backed by CPU time, they are backed by merchants willing to trade goods and services for them.
When creating bitcoins what exactly are our CPU's processing? Are we using this processing power like seti@home or foldinghome types of programs?
The short answer is that the computations are used to secure the Bitcoin network from attack.
Also it seems like since I didn't get into creating bitcoins from the very start it's just not worth my electric bill to create more bitcoins.
Another myth is that Bitcoin is about getting bitcoins by mining. Mining is a niche activity. You are supposed to use bitcoins as a medium of exchange just like any other currency.
Are there companies that will buy extra CPU or GPU cycles?
Parabon, but they only work with institutions.