word processors
The following are observations and opinions from an unschooled seedpicker.

Mellel is the word processor of choice for students, academics and writers, it’s much more robust than Apple’s Pages (as of Spring 07), but not as pretty and they’re working on it all the time.
Pages is pure Mac software (part of the iWork package) and obviously works superbly. I’m not convinced that it has the muscle to pull off a PhD thesis, but for lesser efforts it does well. It ports files directly to and from Word for compatibility with all of those sorry souls who’ve never thought beyond business software. Even if you like word, etc., no Word Processing app comes even close to the way Pages handles graphics . . . NONE! So one idea is to write in something else, and then do final edits and layouts, insert graphics and other media in Pages.
MS Office for Mac is not horrible, the 2004 version just wasn’t built for Macs (and Intel Macs read it through rosetta), but there’s word that the 2007 version coming out in Spring works more seamlessly and is less of a memory hog.
NeoOffice An alternative to MS Office that is FREE! and runs and operates just life MS Office (i.e., it has the same feel, same progs, but uses much less memory). The only downside is that it’s not as round and curvy as MS Office, but did I mention it is FREE and operates more smoothly?

Corel’s WordPerfect Office is the standard for writers and academics using PCs. It’s a line based formatting system (note MS Office is a paragraph based system . . . meaning it will only format paragraphs). The flexibility of this program makes is vastly superior to Word when it comes to writing and composing documents. The difference between WordPerfect and Word arises from the fact that Word is made with a focus on the business community and acts like that, WordPerfect is made with an eye towards writing.
If you’re concerned about compatibility, WP will save in any format Word can read, but more importantly will publish directly to pdf (public distribution format) which is how you should really share your documents.
MS Office is the standard in the business world (but it doesn’t have to be). It’s a paragraph based formatting system and good for writing template style business documents with no creativity. It assumes you’re a moron, except for when it assumes you’ve got a PhD in programming.
Open Office is the PC version of Neo Office. It’s FREE and highly functional. It’ll do anything you do now with MS Office, but it’ll do it for free.
Nota Bene is the premier academic/author software. It’s so fabulously complex, I can’t explain it here.
You’d better be using PDFs
When considering saving a file for someone else to read, use PDF (not .doc!). PDF stands for public distribution format and is made for distribution. When saving or publishing to .pdf, you preserve the formatting so that other people will read or can print the document exactly how it was on your own computer (even if you use odd fonts the reader does not have). . . .pdf is the file format used when writers and academics are sending their work around to be reviewed by others since it ensures that fonts and formatting remain exactly as the author intended.
Usually, most word-processors either “print” or “publish” to PDF (a few might use the “save as” option). Macs have this built into the print menu and Wordperfect has it built into the “publish to” menu, Word (at least 2003 and up) also access it via the print menu (select Print and then choose Adobe PDF as the printer instead of your normal printer).